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Newell Brands' Quarterly Earnings Unexpectedly Rise Amid Tariff Refunds

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Newell Brands' Quarterly Earnings Unexpectedly Rise Amid Tariff Refunds

Newell Brands' (NWL) second-quarter earnings unexpectedly rose year over year on the back of tariff refunds, while the consumer products manufacturer returned to revenue growth for the first time in more than four years.

Adjusted earnings rose to $0.42 per share from $0.24 a year earlier, defying expectations for a decline to $0.20. The results included a $0.17 gain tied to tariff refunds.

Earlier this year, the US Supreme Court invalidated tariffs imposed under the International Emergency Economic Powers Act.

The Sharpie maker's net sales increased 3% annually to $1.99 billion, exceeding the FactSet-polled consensus of $1.98 billion.

Newell's shares soared as high as 39% on Friday, before paring back gains to nearly 12% most recently. The stock has gained 54% this year.

"We returned to year-over-year growth in both net sales and core sales for the first time in over four years," Chief Executive Chris Peterson said on an earnings call, according to a FactSet transcript.

Newell's US market delivered about 5% of net sales growth, the first time its domestic business has grown since COVID-19, Peterson told analysts.

Newell raised its full-year normalized EPS projections to a range of $0.73 to $0.77 from $0.56 to $0.60. Wall Street's consensus is $0.58. The increase to Newell's EPS guidance is fully attributable to the $0.17 one-time recovery of tariffs, Chief Financial Officer Mark Erceg said on the call.

The company will use these tariff refunds, alongside productivity and cost-control efforts, to offset "significant inflationary pressures," Erceg said. "We believe this negates the need for broad-based pricing actions," he added.

The company now expects its full-year net sales to grow 1% to 2%, compared with the previous outlook of flat to up 2%. Analysts surveyed by FactSet expect 1.3% year-on-year growth to $7.30 billion.

The company now forecasts a category decline of 1% versus a 2% drop expected before the start of the year, Peterson said. "We expect Newell to grow faster than this, driven by the improved capabilities we have built over the past several years," he said.

Procter & Gamble's (PG) fiscal fourth-quarter revenue fell short of market estimates on Wednesday, while the consumer goods giant said higher costs could weigh on its fiscal 2027 earnings.

Price: $5.77, Change: $+0.63, Percent Change: +12.16%

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