Newell Brands raises 2026 sales growth forecast to 2%–3% after 3.7% quarterly growth
Key Facts
Newell Brands raised its fiscal 2026 net sales growth forecast to a range of 2% to 3%, from its previous forecast of 1% to 2%, as it reported third-quarter results on October 30. The company also raised its core sales growth forecast to 1%–2%, from a previous range of flat to 1% growth. The company said the forecast revision reflected third-quarter performance and updated expectations for the fourth quarter. Third-quarter net sales were $1.873 billion, up 3.7% year over year, while core sales grew 3.3%. This followed the company's return to sales growth in the second quarter for the first time in more than four years, when net sales rose 3.0% and core sales increased 2.3%.
Third-quarter results confirmed that growth extended across more than one business, with the CEO saying the company recorded its second consecutive quarter of year-over-year sales growth. He added that growth spanned the U.S. and international markets, four of the company's six businesses, and seven of its 10 largest brands. Segment performance varied sharply, however: Home and Commercial Solutions sales were $1.01 billion, compared with $942 million a year earlier, while Learning and Development sales were $692 million versus $681 million. By contrast, Outdoor and Recreation sales fell to $169 million from $183 million. On a core sales basis, Home and Commercial Solutions grew 6.0%, while Outdoor and Recreation declined 6.4%.
On profitability, Newell Brands kept its full-year adjusted operating margin forecast at 10.0%–10.4% and narrowed its adjusted diluted earnings-per-share forecast to $0.74–$0.76 from $0.73–$0.77. The midpoint of the earnings-per-share range therefore remained $0.75, and the company did not raise it. In the third quarter, adjusted operating margin was 9.8%, compared with 8.9% in the year-earlier period, while adjusted gross margin rose to 35.2% from 34.5%. The CFO said higher sales and productivity efforts offset inflation that exceeded the company's expectations. He added that a higher sales outlook and additional cost-containment efforts supported keeping the midpoints of the adjusted margin and earnings-per-share forecasts unchanged.
The accounting results, by contrast, showed a third-quarter net loss of $81 million, compared with net income of $21 million a year earlier. The results included a non-cash impairment charge of $101 million related to an indefinite-lived trade name. Reported operating margin fell to 1.4% from 6.6% in the year-earlier period, despite the improvement in adjusted margin. On an adjusted earnings basis, the company posted $86 million, compared with $70 million a year earlier. Adjusted quarterly earnings per share matched analysts' estimate at $0.20, while revenue was $1.9 billion, above the estimate of $1.86 billion.
The revision extends beyond sales and profitability forecasts: operating cash flow year to date fell to $93 million through the end of the third quarter, from $103 million in the year-earlier period. The company cut its fiscal 2026 operating cash flow forecast to about $150 million. It attributed the reduction to two non-recurring items: one related to the termination of defined-benefit plans, and the other to lower expected proceeds from receivables discounting. On financing, the company issued $600 million of senior notes during the quarter bearing interest at 6.250% and due in 2031. It used the proceeds to redeem notes bearing interest at 6.375% and due in 2027, and to repay part of its new credit facility.
The company said it expects to reduce total debt and securitization financing by about $200 million during 2026, describing deleveraging as a key priority. For the fourth quarter, it expects growth of 1% to 3% in both net sales and core sales, and adjusted earnings per share of $0.17 to $0.19. The company had announced that its third-quarter earnings conference would be held on October 30 at 7:30 a.m. Eastern time. Newell Brands shares closed at $5.08 on October 29, according to EL7 data. These indicators place the updated growth outlook alongside a picture of improving sales and adjusted margin, an accounting loss, and lower expected annual cash flow.