NEWELL BRANDS INC. (NWL): Results of Operations and Financial Condition
NEWELL BRANDS INC. (NWL) filed an SEC Form 8-K — Results of Operations and Financial Condition. Newell Brands Announces Second Quarter 2026 Results Returns to Sales Growth for the First Time in Over Four Years Results Exceed Expectations Across All Key Metrics Raises Full Year Outlook ATLANTA, GA – July 31, 2026 – Newell Brands (NASDAQ: NWL) today announced its second quart
How this was made
The 30-second read
Why it matters
Traders can reprice NWL based on the disclosed Q2 margin expansion, EPS improvement, and the raised full-year outlook, while also monitoring how much of the improvement is attributable to tariff recoveries versus ongoing operational execution.
Market read
A turnaround milestone with raised guidance and a refreshed revolver is a direct catalyst for NWL’s near-term valuation and risk premium.
What to watch
Operating cash flow did not benefit from the tariff recovery in Q2 because it was not collected by quarter end, which could temper quality-of-earnings concerns.
Newell Brands Announces Second Quarter 2026 Results Returns to Sales Growth for the First Time in Over Four Years Results Exceed Expectations Across All Key Metrics Raises Full Year Outlook
Net sales increased 3.0%, core sales grew 2.3%, reported and normalized margins expanded materially, normalized diluted EPS increased to $0.42 from $0.24, and the Company raised its full-year outlook across net sales, core sales, normalized operating margin, normalized EPS and operating cash flow.
Actuals vs. the company’s prior outlook
from its previous release| Metric | Guided | Reported | Verdict |
|---|---|---|---|
| Full Year 2026 Net Sales | Flat to 2% | $2.0 billion, an increase of 3.0% compared with the prior year period | n/a |
| Full Year 2026 Core Sales | (1%) to 1% | Core sales grew 2.3% compared with the prior year period | n/a |
| Full Year 2026 Normalized Operating Margin | 8.6% to 9.2% | 16.2% of sales | n/a |
| Full Year 2026 Normalized EPS | $0.56 to $0.60 | $0.42 | n/a |
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net salesGAAP | $2.0 billion | – | 3.0% |
| Core sales growthnon-GAAP | 2.3% | – | 2.3% |
| Gross marginGAAP | 40.7% | – | – |
| Normalized gross marginnon-GAAP | 40.8% | – | – |
| Operating incomeGAAP | $283 million | – | – |
| Operating marginGAAP | 14.2% | – | – |
| Normalized operating incomenon-GAAP | $324 million | – | – |
| Normalized operating marginnon-GAAP | 16.2% of sales | – | – |
| Net interest expenseGAAP | $87 million | – | – |
| Income tax provisionGAAP | $89 million | – | – |
| Normalized income tax provisionnon-GAAP | $65 million | – | – |
| Net incomeGAAP | $106 million | – | – |
| Normalized net incomenon-GAAP | $180 million | – | – |
| Diluted EPSGAAP | $0.25 | – | – |
| Normalized diluted EPSnon-GAAP | $0.42 | – | – |
| Normalized EBITDAnon-GAAP | $406 million | – | – |
| Year-to-date operating cash outflowGAAP | $204 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Home & Commercial SolutionsNet sales were $903 million compared with $892 million in the prior year period, reflecting a core sales decline of 0.4%, as well as the impact of favorable foreign exchange. Core sales growth in the Kitchen and Home Fragrance businesses was more than offset by a core sales decline in the Commercial business. | $903 million | – | – |
| Learning & DevelopmentNet sales were $851 million compared with $809 million in the prior year period, reflecting core sales growth of 4.9%, as well as the impact of favorable foreign exchange. Core sales increased in both the Baby and Writing businesses. | $851 million | – | – |
| Outdoor & RecreationNet sales were $240 million compared with $234 million in the prior year period, reflecting core sales growth of 3.7%, as well as the impact of unfavorable foreign exchange. | $240 million | – | – |
Q3 2026 and full year 2026 outlook
- RevenueQ3 2026 Net Sales 2% to 3%; Updated Full Year 2026 Net Sales 1% to 2%
- NoteQ3 2026 Core Sales 2% to 3%
- NoteQ3 2026 Normalized Operating Margin 9.5% to 10.2%
- NoteQ3 2026 Normalized EPS $0.18 to $0.20
- NoteUpdated Full Year 2026 Core Sales Flat to 1%
- NoteUpdated Full Year 2026 Normalized Operating Margin 10.0% to 10.4%
- NoteUpdated Full Year 2026 Normalized EPS $0.73 to $0.77
- NoteFull year 2026 operating cash flow around $400 million
What drove it
- Net sales growth reflected core sales growth of 2.3% and favorable foreign exchange.
- Gross profit benefited slightly from higher sales and gross productivity savings which more than offset higher inflation costs.
- The year-over-year increase in normalized operating income primarily reflected higher gross profit partially offset by higher advertising and promotion spending.
- Second quarter reported and normalized results included approximately $100 million pretax, or approximately $76 million after tax, from tariff recoveries related to IEEPA tariffs that were expensed in 2025. The impact is equivalent to approximately $0.17 per diluted share.
- Second quarter normalized results included approximately $26 million pretax, or approximately $19 million after tax from tariff recoveries related to IEEPA that were expensed in the first quarter of 2026. The impact is equivalent to approximately $0.04 per diluted share.
- Home & Commercial Solutions operating income was $49 million, or 5.4% of sales, compared with $24 million, or 2.7% of sales, in the prior year period. Normalized operating income was $68 million, or 7.5% of sales, compared with $44 million, or 4.9% of sales, in the prior year period.
- Learning & Development operating income was $308 million, or 36.2% of sales, compared with $202 million, or 25.0% of sales, in the prior period. Normalized operating income was $314 million, or 36.9% of sales, compared with $207 million, or 25.6% of sales, in the prior year period.
- Outdoor & Recreation operating income was $4 million, or 1.7% of sales, compared with $8 million, or 3.4% of sales, in the prior year period. Normalized operating income was $9 million, or 3.8% of sales, compared with $13 million, or 5.6% of sales in the prior year period.
Concerns
- Higher-than-anticipated commodity and transportation costs were partially offset by stronger sales, gross productivity and disciplined overhead management.
- Higher advertising and promotion spending partially offset the increase in gross profit.
- Outdoor & Recreation operating income was $4 million, or 1.7% of sales, compared with $8 million, or 3.4% of sales, in the prior year period.
- Outdoor & Recreation normalized operating income was $9 million, or 3.8% of sales, compared with $13 million, or 5.6% of sales in the prior year period.
- Home & Commercial Solutions reflected a core sales decline of 0.4%.
- Net interest expense was $87 million compared with $82 million in the prior year period.
- The income tax provision was $89 million compared with $25 million in the prior year period.
What to watch
- Q3 2026 Net Sales outlook of 2% to 3% and Core Sales outlook of 2% to 3%.
- Q3 2026 Normalized Operating Margin outlook of 9.5% to 10.2% and Normalized EPS outlook of $0.18 to $0.20.
- Receipt of substantially all of the IEEPA tariff recovery before year-end, which is assumed in the around $400 million full-year operating cash flow outlook.
- Current-year tariff and inflationary impacts during the balance of 2026.
- Learning & Development core sales growth in the Baby and Writing businesses, and the Commercial business within Home & Commercial Solutions.
Balance sheet and cash flow
- Year-to-date operating cash outflow was $204 million compared with $271 million in the prior year period.
- Debt outstanding was $5.0 billion at the end of the second quarter of 2026, compared with $5.1 billion at the end of the second quarter of 2025.
- Cash and cash equivalents were $209 million at the end of the second quarter of 2026, compared with $219 million at the end of the second quarter of 2025.
- Subsequent to quarter end, the Company entered into a new $800 million asset-based revolving credit facility, replacing the existing secured revolving credit facility and extended general maturity to 2031.
- The tariff recovery did not benefit second-quarter operating cash flow as it had not been collected as of quarter end.
- The updated full-year operating cash flow outlook assumes receipt of substantially all of the IEEPA tariff recovery before year-end.
Analysis
Newell Brands reported a return to year-over-year growth, with net sales of $2.0 billion increasing 3.0% and core sales growing 2.3%. The growth was supported by favorable foreign exchange. Learning & Development delivered core sales growth of 4.9%, with increases in both Baby and Writing, while Outdoor & Recreation posted core sales growth of 3.7%. Home & Commercial Solutions reported a core sales decline of 0.4%, as Kitchen and Home Fragrance growth was more than offset by Commercial weakness.
Profitability improved materially. Gross margin rose to 40.7% from 35.4%, while normalized gross margin increased to 40.8% from 35.6%. Operating income increased to $283 million from $171 million, and normalized operating income increased to $324 million from $208 million. The Company cited higher sales and gross productivity savings as more than offsetting higher inflation costs at gross profit, while higher advertising and promotion spending partially offset the gross-profit improvement.
The reported profitability includes a significant tariff-recovery benefit. Second-quarter reported and normalized results included approximately $100 million pretax, or approximately $76 million after tax, related to IEEPA tariffs expensed in 2025, equivalent to approximately $0.17 per diluted share. Normalized results also included approximately $26 million pretax, or approximately $19 million after tax, related to IEEPA tariffs expensed in the first quarter of 2026, equivalent to approximately $0.04 per diluted share. Net income was $106 million versus $46 million, normalized net income was $180 million versus $101 million, and normalized diluted EPS was $0.42 versus $0.24.
Segment profit performance was uneven. Learning & Development generated operating income of $308 million, or 36.2% of sales, compared with $202 million, or 25.0% of sales, in the prior period. Home & Commercial Solutions operating income was $49 million, or 5.4% of sales, compared with $24 million, or 2.7% of sales. Outdoor & Recreation operating income declined to $4 million, or 1.7% of sales, from $8 million, or 3.4% of sales, and its normalized operating income declined to $9 million from $13 million.
Cash flow remained an outflow year to date, although it improved to $204 million from $271 million, primarily because of working-capital improvements and a lower incentive-compensation payment. The tariff recovery had not been collected at quarter end and did not benefit second-quarter operating cash flow. The Company raised its full-year outlook and now expects net sales growth of 1% to 2%, core sales of Flat to 1%, normalized operating margin of 10.0% to 10.4%, normalized EPS of $0.73 to $0.77, and operating cash flow of around $400 million. The operating cash flow outlook assumes receipt of substantially all of the IEEPA tariff recovery before year-end.
Management, verbatim
Newell Brands returned to year-over-year growth in both net sales and core sales in the second quarter, marking an important milestone in our turnaround. The improvement was broad-based across the portfolio and reflects stronger innovation, higher levels of advertising and promotional support and vastly improved go-to-market capabilities we have built over the past several years. These investments have strengthened the capabilities required to win in our industry and established a solid foundation upon which, we believe, profitable growth can be achieved and sustained in the years ahead.
Chris Peterson, Newell Brands President and Chief Executive Officer
Second quarter results were above our expectations across all key financial metrics as stronger sales, gross productivity and disciplined overhead management more than offset higher-than-anticipated commodity and transportation costs. Based on our second quarter performance, including the IEEPA tariff refund P&L benefit we recorded during the quarter and the cash refund we expect to receive during the second half of the year, and improving top line trends we are raising our full-year outlook for net and core sales growth, normalized operating margin, normalized earnings per share and operating cash flow.
Mark Erceg, Newell Brands Chief Financial Officer
Not in the filing
stated, not guessed- Period-end date
- Exact prior-year total net sales amount
- Prior-quarter comparisons for reported metrics
- Free cash flow
- Share repurchases
- Dividends
- Gross-margin guidance
- Operating-expense guidance
- Tax-rate guidance
- Prior full-year operating cash flow outlook
- Quantitative comparison of second-quarter actual results with prior full-year guidance on a like-for-like period basis
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is an SEC 8-K (Item 2.02) with an attached earnings release for Newell Brands’ second quarter 2026 results and outlook update.
Ticker impact
Newell Brands reported Q2 2026 results with gross margin up to 40.7% and raised full-year outlook, plus a new $800M revolver.
Likely positive bias for the next session and into guidance-follow-through, with volatility around tariff-recovery normalization.
The filing discloses multiple concrete, decision-relevant datapoints: Q2 net sales and EPS beats, margin and operating margin expansion, full-year outlook raise, and a post-quarter-end credit facility extension to 2031.
Market effects
Consumer/housewares peers may see read-across on margin durability and tariff pass-through, but this is company-specific.
Limited, primarily US-listed consumer discretionary sentiment.
Tariff and transportation cost commentary may matter for multinational supply chains, but no new cross-border policy is disclosed.
Counterpoint
Tariff recovery benefits and timing of cash collection may overstate underlying operating momentum if normalized costs reassert.
Key entities
- companyNewell Brands Inc.
Reported Q2 2026 results, raised full-year outlook, and entered a new $800M asset-based revolving credit facility to 2031.
- factorIEEPA tariff recoveries
Pretax tariff recovery P&L benefits included in Q2 and referenced for expected cash refunds in 2H 2026.
