Newell Brands said its Outdoor & Recreation segment posted net sales of 391 million in the third quarter. Net sales exceeded 2019 levels.
Reported operating income for the segment was $ 27 million, or 6.9 percent of sales, compared to reported operating income of $ 39 million, or 10.2 percent of sales, for the same period last year. Normalized operating income was $ 34 million, or 8.7 percent of sales, compared to $ 46 million, or 12.0 percent of sales, for the same period last year.
The Outdoor & Recreation segment includes Aerobed, Bubba, Campingaz, Coleman, Contigo, Marmot, Stearns and ExOfficio.
In the third quarter of 2020, core sales grew by 8.1 percent. Normalized operating income had improved to $ 46 million, or 12.0 percent of sales, compared to $ 37 million, or 10.4 percent of sales, for the same period last year.
Operating results for the third quarter of 2021
Company-wide net sales were $ 2.8 billion, up 3.3 percent from the same period last year, largely reflecting core sales growth of 3.2 percent. Net sales were 8.5 percent above the level of the third quarter of 2019.
Newell operates four other segments: Commercial Solutions, Home Appliances, Home Solutions and Learning & Development. Other major brands outside the Outdoor & Recreation segment include Rubbermaid, Paper Mate, Sharpie, Dymo, EXPO, Parker, Elmer’s, Coleman, Marmot, Oster, Sunbeam, FoodSaver, Mr. Coffee, Rubbermaid Commercial Products, Graco, Baby Jogger, NUK, Calphalon, Contigo, First Alert, Mapa, Spontex and Yankee Candle.
Reported gross margin was 30.4 percent compared to 33.9 percent in the same period last year as headwinds from inflation, particularly in relation to resin, finished goods, transportation and labor, the benefits from savings in fuel productivity, business mix and pricing more than made up for it. The normalized gross margin was 30.6 percent compared to 33.9 percent in the same period of the previous year.
Reported operating income was $ 281 million compared to reported operating income of $ 363 million for the same period last year. Reported operating margin was 10.1 percent compared to 13.4 percent for the same period last year, largely reflecting headwinds from inflation and an increase in advertising and promotional costs that took advantage of lower overheads, savings in fuel productivity, business mix and pricing more than made up for it. Normalized operating income was $ 317 million, or 11.4 percent of sales, compared to $ 403 million, or 14.9 percent of sales, for the same period last year.
Interest expense was $ 65 million compared to $ 71 million for the same period last year.
The company recorded a tax provision of $ 25 million compared to a tax benefit of $ 21 million in the same period last year, reflecting a reduction in each tax benefit. The normalized tax expense was $ 20 million compared to a tax benefit of $ 23 million for the same period last year.
The company reported net income of $ 190 million, or $ 0.44 diluted earnings per share, compared to net income of $ 304 million, or $ 0.71 diluted earnings per share, for the same period last year. The change compared to the previous year essentially reflects the decline in the reported operating result and a change in the tax provision due to a reduction in the separate services.
Normalized net income was $ 231 million, or $ 0.54 normalized diluted earnings per share, compared to $ 356 million, or $ 0.84 normalized diluted earnings per share, for the same period last year.
“We continued to perform very well in the third quarter and our results reflect the effectiveness of our strategy and the resilience and agility of our operating model. Strong consumer demand, fueled by innovation, resulted in core sales growth of 3.2 percent, which is at the high end of our evergreen target, on top of a difficult year-on-year comparison of 7.2 percent, ”said Ravi Saligram, President and CEO. “As we take steps to address significant inflationary pressures and supply chain constraints, we are also advancing our strategic priorities by further reducing complexity, capitalizing on international opportunities and building operational excellence across the company. I am confident that the company has a long way to go to create value as we position it for sustainable and profitable growth while building competitive advantages. “
Chris Peterson, CFO and President, Business Operations said, “In the third quarter, strong operational performance combined with financial discipline resulted in better than expected operating profit and sustained progress on the cash conversion cycle. While the external environment remains challenging and volatile, the strong results for the year to date make us confident of increasing our sales and profit prospects for the full year 2021. We now forecast core revenue growth of 10 to 11 percent and normalized earnings per share of $ 1.69 to $ 1.73 in 2021. “
The company increased its forecast for full year 2021 net sales to $ 10.38 billion to $ 10.46 billion from its previous range of $ 10.1 billion to $ 10.35 billion. The company also improved its full-year 2021 outlook for normalized earnings per share from $ 1.69 to $ 1.73 from its previous range of $ 1.63 to $ 1.73.
Logo courtesy of Newell Brands