Why Newell Brands Flew Higher on Friday
Key Points
Although it posted a loss for the period, Newell edged past analyst estimates on both the top and bottom lines.
It also raised certain full-year guidance items.
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Home products conglomerate Newell Brands (NASDAQ: NWL) posted its first quarter results on Friday, and investors reacted positively to the beat-and-raise performance. At close, Newell's share price was more than 11% higher.
Top-line slump and bottom-line improvement
Newell, the company behind such familiar consumer discretionary brands as Rubbermaid, Sharpie, and Elmer's glue, unveiled those results before market open. For the period, it earned $1.55 billion in net sales, representing a 1% decline over the same quarter of 2025.
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On a brighter note, it managed to narrow its net loss under generally accepted accounting principles (GAAP). This came in at $33 million ($0.08), from the year-ago deficit of $37 million.
Both line items edged past the consensus analyst estimates. On average, pundits tracking Newell stock estimated the company would book $1.51 billion on the top line and post a GAAP net loss of $0.09 per share.
During the quarter, Newell had to cope with lower sales volumes; inflation was also a factor. These were mitigated somewhat by better productivity, the company said, and "pricing actions."
Raises welcome
Investors were more cheered by Newell's guidance than its beats on trailing results. Management raised several of its full-year forecasts, including net sales and "normalized" (i.e., non-GAAP, or adjusted) earnings per share.
The company now believes net sales will be flat to 2% higher this year compared to 2025; previously, it was guiding for a range of 1% decline to a 1% rise. As for normalized EPS, management raised the lower end of its previous range. Its new projection is $0.56 to $0.60 for the year, where formerly it anticipated $0.54 to $0.60.
Although it's usually encouraging when a company ups its guidance, Newell's improvements don't tip me into rating the stock a buy. While the company pays a high-yield dividend and its products are widely known and popular, I don't foresee significant growth coming from its product catalog.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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