NWL - Newell Brands Stock: Combination Of Factors Make It A Short

2024-04-29 13:42:31 ET

Summary

• Newell Brands' Q1 results show declining sales, but some improvements in gross margin and operating margin.
• The company's lack of free cash flow and high debt pose significant challenges.
• The upcoming debt maturities and potential refinancing costs add further pressure on the company's cash flows.

Newell Brands Still Overlevered and Declining Sales:

Newell Brands stock ( NWL ) has traded higher after posting a breakeven Q1 on Friday (April 26) versus its initial guide of a loss of $.05-.09. There were some pluses. Core sales were only down 4.7% versus negative 9% last year and slightly better than guidance in Q4. Net sales were down 8.4%, which included weak currency in certain markets, such as Argentina. Gross margin was higher, growing to 30.5% from 26.7% last year and 29.9 in Q4. However, "normalized" gross margin, which basically ignores some bad stuff, actually declined sequentially to 31.2% from 32.3 in Q4....

For further details see: