Newell Brands (NWL) Q2 2025 earnings summary

Executive summary

• Q2 2025 results met expectations, with normalized operating margin up to 10.7% and normalized EPS at $0.24, despite a higher tax rate and challenging macroeconomic conditions.

• Net sales for Q2 2025 declined 4.8%-5% year-over-year to $1.9-$1.94 billion, reflecting soft global demand, category softness, and retailer actions.

• Gross margin expanded for the eighth consecutive quarter, reaching 35.4%-35.6%, the highest in four years.

• Significant progress in tariff-related distribution wins and major innovation launches, including a Yankee Candle brand refresh, are expected to drive H2 2025 growth.

• Implemented a new corporate strategy in 2024, including a new operating model, talent upgrades, and a reduced brand portfolio.

Financial highlights

• Normalized gross margin improved to 35.6% for Q2 2025, up from 34.4% year-over-year.

• Q2 operating income rose to $171 million (8.8% margin), up from $163 million (8.0%) last year.

• Net income for Q2 2025 was $46 million; normalized net income was $101 million.

• Net leverage ratio was 5.5x, with net debt at $4.86 billion as of June 30, 2025.

• Operating cash flow was an outflow of $271 million, impacted by proactive inventory purchases and higher working capital needs.

Outlook and guidance

• Full-year 2025 net and core sales expected to decline 3%-2%, with normalized operating margin guidance at 9%-9.5%.

• Updated normalized EPS guidance to $0.66-$0.70, reflecting a $0.05 per share non-recurring tariff impact.

• Operating cash flow for 2025 expected between $400 million-$450 million.

• Q3 2025 guidance: net and core sales to decline 4%-2%, normalized operating margin 9.1%-9.5%, normalized EPS $0.16-$0.19.

• Long-term targets include low single-digit core sales growth, 50 bps annual operating margin improvement, and ~90% free cash flow productivity.