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    NWL
    Earnings call· Jun 2026(Q2 FY26)

    NEWELL BRANDS Q2 FY26 earnings call NWL

    Jul 31, 2026 Source

    Executive summary

    Newell Brands Q2 FY26 — Return to Top-Line Growth and Raised Full-Year Outlook

    Newell Brands returned to top-line growth in Q2 FY26, driven by strengthened innovation, distribution gains, and improved brand marketing, exceeding expectations across key financial metrics. The company raised its full-year outlook, leveraging productivity savings and tariff recoveries to offset significant inflationary pressures without broad-based pricing actions, aiming for sustainable growth and strong cash generation.

    Highlights

    5

    • Net sales increased 3% and core sales grew 2.3% in Q2 FY26, exceeding guidance and marking the first year-over-year growth in over 4 years.

    • 5 of 6 business units and 7 of 10 top brands delivered year-over-year core sales growth, with U.S. net sales growing approximately 5%.

    • Normalized diluted EPS was $0.42, significantly exceeding the original Q2 guidance range of $0.16-$0.19 (excluding one-time tariff benefits, EPS was $0.21).

    • Operating cash flow improved by $67 million year-over-year in H1 FY26, with cash conversion cycle improving by 15 days.

    • Full-year outlook raised across all key financial metrics, with net sales growth now expected at 1%-2% and normalized diluted EPS between $0.73-$0.77.

    Concerns

    4

    • Input cost inflation is expected to be closer to $200 million for FY26, up from $100 million expected at the start of the year, with $50 million of that increase appearing since the last earnings call.

    • Commercial segment remained below prior year in Q2, despite sequential improvement.

    • International business was down in Q2, particularly in Europe due to softer demand and Middle East spillover, though expected to improve.

    • Net P&L tariff headwind for FY26 is expected to be $127 million, $12 million higher than FY25, excluding IEEPA refunds.

    Guidance & targets

    14
    CategoryTargetConfidence
    Full-year Net Sales Growth
    1% to 2%
    high materiality
    High
    Full-year Core Sales Growth
    flat to 1%
    high materiality
    High
    Full-year Normalized Operating Margin
    between 10% and 10.4%
    high materiality
    High
    Full-year Effective Tax Rate
    around 20%
    medium materiality
    High
    Full-year Normalized Diluted EPS
    between $0.73 and $0.77
    high materiality
    High
    Full-year Operating Cash Flow
    approximately $400 million
    high materiality
    High
    Full-year Capital Expenditures
    about $200 million
    medium materiality
    High
    Year-end Net Leverage Ratio
    comfortably below 4.5x
    high materiality
    High
    Q3 Net Sales Growth
    between 2% and 3%
    high materiality
    High
    Q3 Core Sales Growth
    between 2% and 3%
    high materiality
    High
    Q3 Normalized Operating Margin
    between 9.5% and 10.2%
    high materiality
    High
    Q3 Normalized Diluted EPS
    between $0.18 to $0.20
    high materiality
    High
    Q3 Effective Tax Rate
    about 10%
    medium materiality
    High
    Incremental Cash from Investing Activities
    $60 million
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Learning & Development
    Strongest part of the portfolio, led by continued strength in Baby and a return to growth in Writing. Baby benefited from strong consumer demand, increased distribution, and new product innovation. Writing supported by distribution gains, innovation, and stronger back-to-school execution.
    Baby sales growth: double-digitWriting core sales growth: returned to core sales growthGraco U.S. POS growth: strong double-digit rateGraco market share gain: 2.7 points year-to-dateNUK U.S. POS growth: double-digit
    		—nearly 5%——
    Home & Commercial
    Kitchen & Home Fragrance returned to core sales growth, reflecting improved execution and consumer response. Commercial remained below prior year but improved significantly, focusing on strengthening execution and innovation.
    Kitchen core sales growth: first quarter of growth since early 2023Home Fragrance owned channels growth: second consecutive quarterHome Fragrance comparable retail stores growth: first time in more than a decade
    		—returned to core sales growth (Kitchen & Home Fragrance)——
    Outdoor & Recreation
    Returned to core sales growth during the important second quarter outdoor season, with the U.S. leading. Highlighted Coleman Snap 'N Go as consumer-led innovation.
    U.S. leading the improvement
    		—nearly 4%——

    Operational metrics

    30
    Core Sales Growth
    2.3%YoY
    Q2 FY26

    First year-over-year growth in over 4 years.

    Normalized Gross Margin
    40.8%vs 35.6% prior year
    Q2 FY26

    Large increase primarily due to $100 million IEEPA tariff recoveries from 2025.

    Normalized Operating Margin
    16.2%vs 10.7% prior year
    Q2 FY26

    Large increase primarily due to $100 million IEEPA tariff recoveries from 2025.

    IEEPA Tariff Recoveries (2025 expensed)
    $100 million
    Q2 FY26

    Recoveries related to IEEPA tariffs expensed in 2025, recorded in Q2 2026.

    IEEPA Tariff Recoveries (Q1 2026 expensed)
    $26 million
    Q2 FY26

    Recoveries related to IEEPA tariffs incurred and expensed during Q1 2026, recorded in Q2 2026.

    Non-IEEPA Current Year Tariff Expense
    $23 million
    Q2 FY26

    Recognized during Q2 2026.

    Inflationary Pressures
    $60 million
    Q2 FY26

    More than offset by IEEPA tariff recoveries and stronger sales/productivity.

    Advertising & Promotion Investment
    $9 millionincrease
    Q2 FY26

    Increased to support innovation program.

    Advertising & Promotion Spending as % of Sales
    5.7%up 30 bps
    Q2 FY26

    Increased due to higher A&P investment.

    Restructuring and Other Savings
    $30 million
    Q2 FY26

    Including benefits from productivity plan, offsetting wage inflation and higher variable compensation.

    Normalized Overhead as % of Sales
    18.8%down 60 bps vs a year ago
    Q2 FY26

    Dropped due to restructuring and other savings.

    Net Interest Expense
    $87 millionvs $82 million prior year
    Q2 FY26
    Effective Tax Rate
    26.5%vs 19.3% last year
    Q2 FY26
    Normalized Diluted EPS
    $0.42vs $0.24 prior year
    Q2 FY26

    Exceeded high end of original guidance range even when excluding tariff recoveries.

    Cash Conversion Cycle Improvement
    15 daysyear-over-year
    H1 FY26
    Trailing 12-Month Normalized EBITDA
    $1 billion
    TTM Q2 FY26
    Net Leverage Ratio
    4.8xvs 5.4x at Q1 end and 5.5x a year ago
    Q2 FY26

    Improved sequentially and year-over-year.

    Net P&L Tariff Headwind
    $127 million$12 million higher than FY25
    FY26

    Includes existing tariff regime, new Section 301 forced labor tariffs, and potential additional tariffs.

    Inflationary Impacts
    $200 millionup from $100 million expected at start of year
    FY26

    Significant increase in expected inflationary pressures.

    Category Growth
    down approximately 1%
    Q1 FY26

    Better than original assumption of down 2% for the year.

    Category Growth
    essentially flat
    Q2 FY26

    U.S. performing better than EMEA.

    Category Growth Assumption
    decline about 1%
    FY26

    Revised assumption for the full year, remaining cautious for H2.

    U.S. Total Distribution Points
    mid-single digitsvs last year
    Q2 FY26

    Tangible proof of retailer response to stronger innovation and execution.

    Top 10 Brands with POS Growth
    6year-over-year
    Q2 FY26

    Indicates consumer response to new innovations.

    Top 10 Brands Improved Growth Trajectory
    8sequentially
    Q2 FY26

    Indicates improving performance across key brands.

    Peak Program Active Sites
    47up from 39 at end of last year
    Q2 FY26

    Reflects aggressive lean into fuel productivity program.

    Peak Program Sites in Foundation Stage
    16
    Q2 FY26

    Breakdown of sites within the Peak program.

    Peak Program Sites at Base Camp
    9
    Q2 FY26

    Breakdown of sites within the Peak program.

    Peak Program Sites at Climb 1
    15
    Q2 FY26

    Breakdown of sites within the Peak program.

    Peak Program Sites at Climb 2
    7
    Q2 FY26

    Breakdown of sites within the Peak program.

    Industry KPIs

    2
    MetricValueDetails
    Tariff refunds duties$100 millionUSD
    Brand segment performancedouble-digit growth%

    Product announcements

    3
    ProductTypeDetails
    BRUTE trash can (revamped)launch
    Spontex Flex and golaunch
    Coleman Snap 'N Golaunch

    Risks & headwinds

    5
    Input Cost InflationFY26

    $200 million for FY26 (up from $100 million expected at start of year, $50 million increase since last call)

    Mitigation: Aggressive fuel productivity program, overhead reduction efforts, AI enablement initiatives, targeted pricing actions.

    Net P&L Tariff HeadwindFY26

    $127 million for FY26 ($12 million higher than FY25, excluding IEEPA refunds)

    Mitigation: Offsetting with top line growth momentum, fuel productivity savings, and in-year tariff refunds to avoid broad-based pricing.

    Macro Environment Uncertainty and Category GrowthH2 FY26

    Category growth assumed to decline about 1% for FY26 (cautious outlook for H2)

    Mitigation: Newell expects to grow faster than the category due to improved capabilities; monitoring inflation for potential future pricing actions.

    Commercial Segment UnderperformanceQ2 FY26 (expected to improve in Q3)

    Remained below prior year in Q2 FY26

    Mitigation: Strengthening execution, advancing innovation (e.g., revamped BRUTE trash can, BRUTE farm products, Spontex Flex and go), building on targeted distribution wins.

    International Business WeaknessQ2 FY26 (expected to improve in Q3)

    Down in Q2 FY26 (particularly Europe)

    Mitigation: Expect sequential improvement in Q3, leveraging the same capability build-out as domestic markets.

    What to watch in Q3 FY26

    5

    Commercial Segment Core Sales Growth

    Q3 FY26
    Currentbelow prior year
    Targetpositive growth

    Why it matters

    Indicates the effectiveness of innovation and execution efforts in a lagging segment.

    But we believe you're going to see that business inflect in the near term, possibly in the third quarter.

    Q&A highlights

    5

    Why is Commercial lagging, and what's the line of sight for improvement?

    Commercial improved sequentially but was still negative. Management is optimistic for Q3, driven by new innovation like revamped BRUTE trash cans and farm products, and the Spontex "Flex and go" sponge in Europe. They expect inflection in the near term, possibly Q3.

    “We are currently launching a revamped BRUTE trash can that is a superior trash can versus what we had previously. We've also launched the line of BRUTE farm products that is getting strong pickup across rural channels.”

    asked by Lauren Lieberman · answered by Christopher Peterson

    2 min read6 chapters

    Detailed Narrative

    01

    Turnaround Strategy Bearing Fruit

    Newell Brands' multi-year turnaround strategy, focused on rebuilding commercial and operating capabilities, is now yielding results. This includes stronger consumer insights, disciplined innovation, improved brand management, and enhanced retailer relationships, leading to distribution gains and positive consumer demand. The company is on track to deliver over 25 Tier 1 or Tier 2 innovation launches for the full year, with all 6 business units having launched significant innovations year-to-date.

    02

    Broad-Based Growth and U.S. Market Strength

    The company achieved year-over-year growth in net sales (3%) and core sales (2.3%) for the first time in over four years, exceeding guidance. This improvement was broad-based, with 5 of 6 business units and 7 of 10 top brands delivering growth. The U.S. market, Newell's largest, led the way with approximately 5% net sales growth, its first growth since COVID, driven by mid-single-digit increases in total distribution points.

    03

    Segment Performance Highlights

    Learning & Development was the strongest segment with nearly 5% core sales growth, led by double-digit growth in Baby (Graco, NUK) and a return to growth in Writing (Sharpie, Elmer's, Prismacolor). Kitchen & Home Fragrance also returned to core sales growth, with Ball canning and Rubbermaid Brilliance performing well. Outdoor & Recreation grew nearly 4%, with U.S. leading the improvement.

    04

    Marketing and Consumer Engagement

    Newell is pairing higher brand support with precise and engaging marketing. An example is the Coleman brand's activation around a viral "Lazy River" product, generating over 90 million earned media impressions and attracting nearly 30,000 new consumer subscribers, demonstrating modern, culturally relevant marketing capabilities.

    05

    Macro Environment and Cost Management

    While the consumer and category environment held up better than expected in H1 (category flat in Q2 vs. 2% decline assumed for FY), the company remains cautious for H2, assuming a 1% category decline for the full year. Significant input cost inflation (now expected at $200 million for FY26) and tariff headwinds🌐 are being offset by aggressive fuel productivity savings, overhead reductions, and AI enablement initiatives, allowing for targeted pricing actions rather than broad-based increases.

    06

    Tariff Recoveries and Financial Discipline

    The company recorded a receivable for nearly $100 million in IEEPA tariff recoveries from 2025, contributing $0.17 to EPS. An additional $26 million in Q1 FY26 IEEPA tariff recoveries were also recorded. These recoveries, combined with productivity, are being used to offset inflation, enabling the company to avoid broad-based pricing actions. The company expects to recover a substantial portion of these funds by year-end and is also liquidating $60 million in life insurance assets for additional cash.

    AI-generated summary of the company’s earnings call. Not investment advice.