NWL - Sharpie maker Newell Brands jumps ~7% on inventory reduction improved cash flow
2023-07-28 15:35:53 ET
Newell Brands ( NASDAQ: NWL ) stock on Friday was among the top percentage gainers on the S&P 500 ( SP500 ), after the owner of brands such as Sharpie and Rubbermaid reported quarterly results that beat estimates, despite a fall in sales.
Investors focused on the positives in what was a largely expected weak Q2 report. Like other consumer discretionary companies, NWL has seen demand for its products fall as consumers get cautious with their spending amid high inflation and elevated interest rates.
"As we look toward the balance of the year, we expect top and bottom-line pressure to persist as consumers continue to wrestle with elevated levels of core inflation and the resumption of student loan repayments," NWL CFO Mark Erceg said in a statement .
NWL earlier in the day posted Q2 adj. earnings per share of $0.24 which beat estimates by 10 cents . Revenue came in at $2.2B, beating consensus by $50M .
However, revenue fell 13% Y/Y, while core sales fell 11.9%. The Graco parent also slashed its full year revenue guidance to a range of $8.2B-$8.34B from a prior outlook of $8.4B-$8.6B. Additionally, it now sees full year core sales declining 12% to 10% from a previous range of 8% to 6%.
Nevertheless, NWL said its YTD operating cash flow was $277M, a marked improvement from outflow of $450M a year ago. Moreover, NWL's inventories declined nearly $700M on a Y/Y basis and nearly $300M on a sequential basis.
"Restoring strong operating cash flow and improving the underlying structural economics of our business remains our primary financial focus this year," Erceg added. "Against those two measures, we were very pleased with our second quarter results, with operating cash flow up over $500M dollars versus last year and normalized operating margin ahead of expectations."
Shares of Newell Brands ( NWL ) have been battered this year, having fallen 21.6% up to their last close. On Friday, they advanced as much as 10.3% to hit a session high of $11.31.
More on Newell Brands
For further details see:
Sharpie maker Newell Brands jumps ~7% on inventory reduction, improved cash flow