Newell Brands Inc (NYSE: NWL) saw its stock sink 14 percent Monday in reaction to a mixed second-quarter report and a downward revision to its full-year outlook.
Newell Brands said it earned 82 cents per share in the second quarter on revenue of $3.729 billion. The Street was modeling the parent company of Rubbermaid and the CrockPot to earn 77 cents per share on revenue of $3.83 billion.
Net income for the quarter fell from $223 million a year ago to $132 million due to a transitory but still notable sales volume decline on Baby and Writing and a tax expense in the quarter.
The company said it completed the divestiture of The Waddington Group and Rawlings Sporting Goods Company. In addition, the process of divesting all other assets held for sale as part of the "Accelerated Transformation Plan" is now underway.
"In the context of these significant changes and a very challenging U.S. retail environment, we delivered second quarter results generally in line with expectations," President and CEO Michael Polk said in the press release.
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The retail landscape is likely to remain "difficult" moving forward but the overall consumer macro data remains "generally good," Polk said. As such, the company expects core sales in the continuing business to improve in the fourth quarter and margins should move higher from the ongoing savings program and a broad-based price increase.
Management guided its full-year EPS outlook from a range of $2.65-$2.85 to a new range of $2.45-$2.62 and sales was cut from $14.4-$14.8 billion to $8.7-$9 billion. The revision includes a negative 20 cent per share impact in the back half of 2018 to the divestiture of Waddington and Rawlings. This is the fourth time in a year the company lowered its guidance.
The company highlighted during its conference call it could see a negative $100 million impact from trade policies moving forward. Polk was quoted by CNBC as saying "virtually ever business has been impacted with the greatest exposure on Baby, Appliances and Food."
The stock traded around $23.06 at time of publication.
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