Newell Brands Inc.

Second quarter 2026 net sales increased 3% to approximately $2 billion and core sales increased 2.3%, with favorable foreign exchange accounting for the difference. Normalized diluted EPS was $0.42 versus $0.24 last year; normalized gross margin was 40.8% versus 35.6% and normalized operating margin was 16.2% versus 10.7%. Management said the margin expansion was primarily due to nearly $100 million of receivables for recoveries related to IEEPA tariffs expensed in 2025, plus $26 million of recoveries related to tariffs incurred in Q1 2026 before they were nullified. Excluding the one-time tariff benefits, gross margin and operating margin would have been up slightly year over year. For the full year, Newell raised guidance to net sales growth of 1% to 2%, core sales growth of flat to 1%, normalized operating margin of 10% to 10.4%, and normalized EPS of $0.73 to $0.77, assuming a full-year tax rate around 20%. Operating cash flow is now expected to be about $400 million, and the company said it expects to finish the year comfortably below 4.5x net leverage.

Chris Peterson framed the quarter as an important proof point in Newell's turnaround, saying the company is rebuilding consumer insight, innovation, brand management, category management, and go-to-market execution. He emphasized that stronger consumer-led innovation, higher A&P, and better retailer execution are now translating into distribution gains and improved POS, with 5 of 6 business units and most top brands growing. His tone was confident but still cautious on the macro environment, noting category growth is assumed to be down about 1% for the full year and that cost inflation and tariffs remain volatile.

Mark Erceg focused on the financial bridge: Q2 sales were up 3%, EPS was $0.42, and normalized margins expanded sharply, although he stressed the increase was largely driven by nearly $100 million of tariff recoveries and $26 million more tied to Q1 2026 tariff reversals. He said year-to-date operating cash flow was an outflow of $204 million, an improvement of $67 million versus last year, helped by lower incentive compensation and a 15-day improvement in cash conversion cycle. He also outlined the cost environment, saying net P&L tariff headwind for 2026 is expected to be $127 million and inflation is now expected to be closer to $200 million, while full-year capex should be about $200 million.

Analysts focused on the underperforming Commercial segment, back-to-school trends, shelf-space gains, international weakness, pricing, and whether the strong quarter was partly helped by timing such as Prime Day. Management said Commercial is improving sequentially and should continue to improve, with new BRUTE, Spontex, and farm-product innovation expected to help, possibly turning positive in Q3. On Back-to-School, management said sell-in and early POS were strong, with better setup than last year and share gains in the first three weeks of July; they also said Prime Day timing affected POS but not shipments materially. On pricing, they said they have not taken broad-based price increases, are using productivity and tariff refunds instead, and could still take future pricing if inflation worsens.