Newell Brands (NWL) Q1 2025 earnings summary

Executive summary

• Q1 2025 net sales declined 5.3% year-over-year to $1.57B, with core sales down 2.1% and sequential improvement in sales growth.

• Gross margin expanded to 32.1% (reported) and 32.5% (normalized), both up over prior year.

• Learning and Development and international business segments delivered core sales growth for the quarter.

• Reported net loss widened to $37M; normalized net loss was $6M, with normalized diluted loss per share at $0.01.

• The company continues to execute a multi-year turnaround plan focused on margin expansion, deleveraging, and operational excellence.

Financial highlights

• Q1 normalized operating margin was 4.5%, above guidance, despite higher A&P spend.

• Net interest expense was $72 million, up $2 million year-over-year.

• Normalized EBITDA was $136M, down from $152M in the prior year.

• Operating cash outflow was $213 million, impacted by inventory pull-forward and higher bonus payouts.

• Net leverage ratio improved to 5.3x from 5.6x a year ago.

Outlook and guidance

• 2025 net sales guidance affirmed at -4% to -2%, including a 1% headwind from category exits.

• Normalized operating margin guidance remains at 9%-9.5%, a 110 bps improvement at midpoint.

• Normalized diluted EPS guidance unchanged at $0.70–$0.76, up 18% at midpoint.

• Core sales guidance revised to -3% to -1% (from -2% to +1%) due to a more cautious category growth outlook.

• Operating cash flow range widened to $400–$500 million, reflecting higher tariff-induced inventory valuations.

• Year-end 2025 leverage ratio expected at 4.5x.

• Q2 2025 guidance: net and core sales down 5%-3%, operating margin 10.4%-10.8%, EPS $0.21–$0.24.