Newell Brands Reports Decline in Q2 2025 Sales, Despite Operating Income Increase

Newell Brands Inc. reported a decline in financial performance for the second quarter of 2025, with net sales of $1.935 billion, down 4.8% from $2.033 billion in the same period last year. The decrease in revenue was attributed to ongoing softness in global demand across all segments and net distribution losses, particularly in the Home and Commercial Solutions (H&CS) and Outdoor and Recreation (O&R) segments. Despite these challenges, the company noted that product innovations and pricing actions, including those aimed at mitigating the impact of tariffs, helped to partially offset the decline. Gross profit for the quarter was $685.7 million, a decrease of 2% year-over-year, but gross margin improved to 35.4% from 34.4% due to productivity gains and lower restructuring-related charges.

In terms of profitability, Newell Brands reported an operating income of $171 million for the second quarter, an increase of 4.9% compared to $163 million in the prior year. This improvement was driven by savings from restructuring actions, particularly related to the company's Realignment Plan, which aims to enhance operational efficiency. Net income for the quarter was $46 million, slightly up from $45 million in the same period last year, resulting in diluted earnings per share of $0.11, unchanged from the previous year. The company’s effective income tax rate decreased to 35.2% from 46.4%, contributing to the slight increase in net income.

For the first half of 2025, Newell Brands reported net sales of $3.501 billion, down 5% from $3.686 billion in the first half of 2024. The decline was similarly attributed to soft global demand and distribution losses, particularly in the H&CS and O&R segments. Gross profit for the six-month period was $1.188 billion, with a gross margin improvement to 33.9% from 32.6% in the prior year. Operating income for the first half increased to $192 million from $179 million, reflecting the impact of restructuring savings and lower charges. However, net income fell significantly to $9 million from $36 million, primarily due to increased interest expenses and a loss on debt extinguishment.

Strategically, Newell Brands is focused on executing its multi-year turnaround plan, which includes enhancing its front-end commercial capabilities and optimizing its operational structure. The company has made significant changes, including the launch of new products and a realignment of its organizational structure to improve efficiency. The Realignment Plan is expected to yield further cost savings and operational improvements, with the remaining actions anticipated to be implemented by the end of fiscal year 2025. Additionally, the company is navigating challenges posed by inflation, tariffs, and changing consumer behaviors, which are impacting its operational landscape.

Looking ahead, Newell Brands remains committed to returning to profitable growth through product innovation, distribution expansion, and international market penetration. The company aims to further improve its gross and operating margins while continuing to reduce its debt levels and enhance cash flow efficiency. Despite the current macroeconomic challenges, Newell Brands is focused on executing its strategic priorities to position itself for long-term sustainable growth.