Newell Brands (NWL) 29 Jul 222022 Q2 Earnings call transcript

Good morning and welcome to Newell Brands’ Second Quarter 2022 Earnings Conference Call. [Operator Instructions] As a reminder, today’s conference is being recorded. A live webcast of this call is available at ir.newellbrands.com. I will now turn the call over to Sofya Tsinis, VP of Investor Relations. Ms. begin. may you Tsinis,

morning, to Good quarter Brands’ earnings call. everyone. you. Newell Welcome second Thank

with are me CEO call the On today Peterson, President and Ravi our and CFO. Chris our Saligram,

Thank on refer GAAP we Investor non-GAAP those found with to these investors, of will considered not measures, remarks We that update I’d available refer GAAP. materially undertake to our measures in over well be non-GAAP available to to call, begin, and will forward-looking uncertainties. we risks cautionary although materials making XX-K, forward-looking are no and certain financial in further the you believe website reconciliations affecting and factors Please which recognize factors measures be course Ravi. in And you. our other and as outcomes will Actual refer we today’s forward-looking for I the Before results earnings language turn we normalized Form between also tables the accordance our other earnings inform measures you risk that useful Form in and statements. SEC of can measures website. release to during these to presented measures. should non-GAAP release, filings non-GAAP including Relations Explanations Investor now I to today’s they the a like and today’s XX-Q as involve of statements. and and as to statements, available obligation the may discussion be on Relations Newell’s call differ superior

our Good second Sofya. morning, welcome you, everyone quarter call. to Thank and

across and excellence. portfolio as focused execution demonstrate results, our with profitable delivered margin growth environment diverse sustainable of quarter on balanced core team. We of by we operational terrific sales We and performance remain operating quarter difficult driving in our another normalized and are which a the and power our pleased second all-weather laser

the XXX while X.X%, last operating normalized improved core For quarter, versus margin points basis sales increased year.

at appliance were fragrance, the growth performance well home the as of benefits across consumption, demand nearly sales us year excellent core period, achievement, contracted dynamics parts and declines the normalized XX QX year-over-year given which X home Brands. and Commercial operating growth QX and We orders the in cycle to Commercial, surprised from from as Baby the Outdoor offset points due stimulus For still during which in sales year food increased basis of of elevated levels the impact from units which in home appliance their to U.S. of some prior is was unit. levels. while significant the was initially expansion the across saw our retailers the growth expected pandemic given challenging QX, continue rightsizing is of this reflected difficult quarter in are U.S., prior and to This are reopening we pre-pandemic X% for fragrance, Writing Newell of increased remaining than although such the & to sales double-digit a a businesses. others performance. growth year-over-year businesses in puts business particularly some a activities, are see comparison not across of half, first food in eighth shift focus more Writing, We Recreation each consecutive meaningful benefiting and on while levels. X as core Core this into margins, business and than home anticipated inventory divergence less customer XX.X% in such These as ahead

The of Campingaz, Paper XX the help our of top Elmer’s, our actions products impact Mr. Contigo, Ball our top which brands quarter, to pricing and brands X to enabled take Mate, Coffee. across grew, mitigate Rubbermaid, Sharpie, XX, us the XX commercial inflation. included has of including Expo, and businesses strength NUK During our and of Rubbermaid

Latin geographic EMEA markets demand APAC modestly. the nearly results, with International war at XX% confidence in to registering Newell’s continues low increased core and mounting of Looking up America and hampered sales prices major regions concerns across were each growth. by Ukraine. consumer In X.X%, due grew to other of EMEA, be regions.

and our new actively are international, While best infrastructure it’s to existing across drive journey we opportunity early days growth. key for leverage ways to synergies in turbocharge unlock analyzing additional markets to

first some Let with strong, quarter sales set in The to comp offices. We starting its did line see Writing, remains me half a reflecting the season. employees season earlier. broad-based or for in and consecutive very into customers which retail challenging prior back-to-school period. some orders across gearing momentum back-to-school Writing our increased the registered most core the back-to-school Growth every more results, in their for region their highlights notwithstanding unit recovery share categories, top in as commercial sixth continued double-digit the decided and orders was as return growth, the business channels shelves shift was to of up of a

season, remain the we half third to we first the Although unfavorably will enthusiastic in orders the quarter. about believe shift affect the back-to-school

comp QX a grew supply shipments on in quarter. by we the Baby serve Baby, In of toughest retail modestly Care. consumers. this to best sales against partners core Ovid focused double-digit are ahead driven to Project implementation its year position A are We of perspective in ensuring slight QX from and possible the helped our shift from

modestly the anticipated, in unprecedented is As category against growth softening XXXX.

the in willing to children their willingness the essential keeping for with benefits. added They up parents nature and and babies safely. are Given this also invest writing to pay category, innovations for premium of gearing continue caregivers to show

which realization, car cookware, growth, of broad-based to with accelerated evolving categories, and excellent core been platforms, core and Strong our elevated sales major level by year’s and business turning preserving availability, Despite of We recently quarters, of QX. strong sustained below Its was food, along more and along pandemic, Baby normalize prior others are the has our strong its consistent third consumers. to portfolio, and mobility, other QX top last past example, very Graco improved categories, performance. start. driven degree, product XX.X% price Turn was the offset to to to than America, across For diversity City disposable a elevated but strength Latin strength grew the sales to the moderate the top with relative posts all in some exception by performing record business were line of both to the during which which leveraged America, to in verticals serves relative continue launched the the team seat the continue a throughout of trends Me improved our to North with off offices quick as fresh adapt to premium in to period including XX a BXB quarter unit of Turn This disruption Jogger commercial delivery. the the to consecutive was which core X gloves, has contributed the particularly saw EMEA. smaller return sales levels. pandemic to softness track In business peak. Commercial

cookware. restaging of nonstick [indiscernible] in the superior are offerings process products, exciting We providing new with

is buy with XXXX. quarterly surges than in funnel. beneficial are work business in a to a that hybrid The While relative strong business substantially trends in food environment, several accentuating tough it waste. the also innovation impacting avoid only particularly to demand solid due to with increased in very remains was category should in inflationary food are comparisons including find business, the behavior, food highly home larger pandemic-related cooking footing be food There results, on and and pre-pandemic more gardening, investment ways levels, propensity occasions bulk challenging to macro greater tightened at to this

the demand fragrance business was are our low America After Our peak consumers pressure sales continued and in core year home the second softness trends EMEA. these leading income Consumption by broad-based to on consumers. communication well and both positioned levels brands constrained ensuring doubling our the on the that nearly ago period as further moderate for while messaging. in capitalize surged, North reinforces value to with in quarter, with declined inflationary

Although level. grew the QX, in relative to business sales was core down the pre-pandemic

near-term home well albeit as below remain as half the fragrance both macros. expect levels to softening difficult category first to comps, We challenged in the due

are is X-year mobility basis. prior stack sales optimizing focusing and assortment appliances to category tough relative for appliance normalize for to quarter long America The core levels our demand these and Asia-Pacific. offsetting a as products from was the to QX on America as continue for expected purchase well cycles elevated years to on given grew increased consumers. product contracted efforts home tiers. a We focusing EMEA Gross than stimulate increases sales in across Latin as North price in more softness with

While pockets the of challenging, market is strength. are U.S. there

decelerate hot sales position and in the leveraging markets the brand of shift recovery business propelled The for decelerated first we conditions delivered and a purchase Recreation share Outdoor by plus a X.X% the ago momentum decisions, X-in-X Accounting XX% in and spot cappuccino single-serve category. back continued in of the was Oster’s bright quarter Latin the to Mr. inflationary business & for growth outdoor quarter. For many America but orders example, across remained position coffee complemented & for that leadership launches Coffee have the the of markets. business, assuming retailer to two across Recreation the equipment beverage still Growth post-pandemic international increase the sequentially this Outdoor ice business. into number the year impact lapped some core half. expect

to play a an we evolves, brands in behavior value. shopper our and leading and consumer lives to categories integral continue good purpose-driven and As role expect remain the

the this is diversity environment. in portfolio advantage an leverage that believe also We our we of

home footing we in. are fragrance very on we home softening while a businesses and the For are example, Writing in solid appliances, and seeing are Commercial and leaning

maintain feat pricing about no particularly fuel impact decisive of our to is sold. through enabled have second to are such as actions absorbed cost the productivity in the we alleviate that inflation inflation X% initiatives quarter. and as of swift gross We margin small on This goods us and encouraged significant the

drive ultimate to and to committed is margins over gross closer remain Of time. higher levels goal to course, getting benchmark we the

some on cost income inflation and There is to consumer we and wallets, particularly greater the a uncertainty stance lower half. at consumer inflation with their weighing is taking second relative the demand, headwinds, during demand a forward, positions. look levels tougher remains As of first levels. shoppers’ at on half we pressuring Higher tougher inventory living elevated and retailers sentiment macro expect

our we the While this we consumer started fragrance, in our than for, categories, demand some had home to plan initially has pivoting both in months, more and anticipated relative in particularly on significant pullback has the past acute initial been accordingly. already been are and development of is action key forecast. challenge another something plan to Strengthening a the dollar bottom top few of presenting lines

We both a are on that have to margins declared driving on further honing evaluate accelerate forward down opportunities efforts our year spend of doubling pricing been We and the XXXX and markets. we discretionary international currency and towards. our actions, in overheads and management as outcome impact the unfavorable of is the mitigate previously productivity we inflation

In mostly expanded expectations, our fact, stronger points, XX operating during management. of cost basis margin normalized which the half, overhead first due Newell’s to was ahead

With the a the transactional our the for as adjusting an result, impact dollar, we of recent unfavorable year margin appreciation accordingly. and outlook expect are

full no currency although basis, outlook a in there our year are there constant and is on change XXXX some parts. moving sales earnings Importantly,

focused inflationary the of executing customer on Newell and our spite transforming and on building year, top and shopping and As in and service journey, engagement Project and of significant our improvement strategic and actions through driving levels consumer balance margin Ovid XXX-degree supply we our navigating enhancing priorities the the momentum. and equally One surrounding the our turbocharging automation, backdrop are simultaneously employee mastering currency international, difficult driving innovations strengthening line, look the on chain the macro culture headwinds, to

become operational cost the opportunities Over agile competitive navigate years, realizing the right commitment express ahead days while I And driving us have saving strategies confident committed advantage and customer-centric have it and to to to paved more across Chris. I’d in driving backdrop softening excellence. the passion that bright several place a are our upwards. unlocking top and are future. We building now, macro consumer to our to remain we hard we past a my to while the organization and turn line. and way like believe the over employees continue gratitude onwards of will whose to best and I resilience, organization work,

and top good of Thank delivered despite better-than-anticipated you, core solid ago performance in ongoing second everyone. Ravi growing and pressures. a on year morning quarter, on sales inflationary comparison difficult with the results We margins

taken to the This firmer have the quarter the much is another to several external footing on testament manage past a challenges. we business effectively put years over to actions

of Before on environment the Ovid. provide update details Project performance, discussing the to quarterly an I operating want Newell’s current and

of While of similar first the elevated quarter. face to changed cost not for costs in to XXXX, has expect for relative inflation, we continue the on of year materially levels balance to X% still the to We outlook sold about inflation the last year. goods of account

to all We good And in to-date. implemented that drivers this be and domestic visibility of At anticipate instances, these ocean will many increases have nearly continue most source wages. we each have finished of into competitors followed. year this the planned freight, buckets. significant inflation price stage, And goods major have we

to our volatile. their greater income more and everyday are as growth manage such such demand businesses we essentials frequent we this, which are forced businesses Commercial to are To being trends, consumer Appliances where and allocate Home housing. to demand adjusting and to Fragrance consumer are demand consumers increased food are wallets ago where mobility we is Home by Category and a close a strong levels. and rates on very staying are as are below inventory consumer forecast base of affected through maintaining significantly experiencing meeting ensure in appropriate in comparisons. being remain period year as portion growth, We Lower such basis gasoline, levels plans Writing, and supply we

industry of Lead signs easing. have external prevalent, coming freight ocean chain shown the supply are times for issues impacting still down. While

of as raw notwithstanding ocean parts, We freight are availability and materials in select seeing as containers, greater also carriers well component shortages areas.

of gone have up, Our have on fill the products and businesses number rates for has most allocation come we down.

and building initiatives more now, Ovid. in continue through While such we Project chain agility headway environment to automation favorable chain the supply make also is supply as

port successfully share very wave select significant better The broad-based the and journey. and On are July that organization. of instrumental place is with are the across appliance first and We to empowering excellence and we cutover. pleased operational transportation is Newell’s omni-channel a reached transformation mitigate Ovid. a significant Project supply X, home we in customers early for congestion to solutions customer our work preparing milestone in the cost, implemented improve company food baby, a groups, U.S. of of pressures service, paid left doing process, it a Project implementation Ovid We second retail under in project bottlenecks, and optimize in off, categories entity. the are external enable of on business still along legal drive wave, enabling across the planning with currently single the have rigorous amount currently Strong go-live successful which take testing coordination expected XXXX. a to the

the a business was more in from expectations, offset of exchange. faced the in productivity seven Normalized was ago. year end exits. the quarter, expansion first top flat the gross headwind to stronger Pricing units of below tax XX.X%, as first than second offset X.X% as for XX.X%, back-to-school unit. at to to quarter versus X.X% pricing CH&S stacked impact of sales Though business ago translated increased percent in $X.XX from point by and initial Disciplined and management last This Net sales of basis growth half decreased sales sales Now store Net $X.X in customer year’s A&P core overhead per interest to both as a $X.XX year normalized year mitigating declined performance to modest in every was of Core normalized savings. a XXX higher turn to fuel exchange improvement versus cost of and a million, point of of diluted productivity expense QX earnings basis Core X and to business nearly basis, XXX rate year difficult as retail grew a sale orders year-over-year operating was On comparison currency. the ago. XX.X% lower X-year wave driven four category volume. sequential offset $XX while to savings fuel the the as gross shift on foreign implementation. of Ovid inflation level. let’s headwind pricing comparisons. performance. was by well sales last the billion a normalized year-over-year similar and from The first increased core margin the XX.X%, $XX a and each foreign impact sales a unfavorable a of million a led business as margin share combination margin there spending challenging and Newell’s

results. driven Home core comps. X.X% Fragrance Core Development Home and on Core and Core both customer comp the business of for on top toughest Commercial by Outdoor the Turning declined Baby Writing demand. a in of Solutions XX.X% of businesses the increased growth its the of base XX.X% sales XX% business X% sales for pricing sales top declined sales segment the the businesses the the year tough posted sales Both X.X% top on Food XX.X% against Core a segment grew grew a comp, ago. for X.X% with & the Appliance Core as Solutions to year. the XX.X% lapped lower growth compares. and Recreation business segment & challenging the sales period. Home notwithstanding Learning comparison for for segment in actions

and in flow a company’s sheet, second Moving flow Ovid to that seasonal with to implementation. inventory the quarter. on believe position first attributable $XXX results peaked the increasing year-to-date of can cash support largely $XX last build compared million was and sales of We through million cash inventory year-over-year. cycle to of wave These the year, the be cash balance to operating QX, as flow use cash conversion a

inventory a forward longer levels reduction are have times other back for supply warranted going in While accordingly. quarters, supply lead and significant half have challenges and our chain we levels higher-than-normal and planning stock safety plan recent adjusted

year enable leverage QX. this the drive cash the from expect half of the generation and strong at to end to of X.Xx in We the ratio back company de-lever the

XXXX, the updated provide for for some and forecast. Before let year outlook our context the full sharing QX me

on spending. customer due the monitoring we get Newell’s businesses on continuing And even competitive we housing, reaction, though back we macro of to and domestic levels. manage category. inflation target to food, With as pricing increased at expect to look more pressure the patterns market such business the most carefully tougher as our both and discretionary assuming environment elasticities shoppers inventory vary dynamic are now, are gas As high we of constraints the which essentials, year, retailer will half order in actions the largely are by low-income

by For a the benefit partially pricing, are decline still full year, a mid-single-digit single-digit offset assuming in high we from volume.

behavior consumers, purchasing to the categories low expect current as the particularly end, across We to at to realities. continue evolve adjust

that While across performance mobility. during we particularly pandemic, home we the businesses with improved disproportionately expect home and recovering normalization fragrance stronger anticipate the Writing across and Commercial appliances, benefited also businesses greater are that

constant backdrop, the bottom-line across to tiers We on shoppers’ are demonstrating of accelerating of reducing a price important all invest including continuing the in changes, strength macro basis, have our we actions shifting the value-focused drive the the supply categories meet our are agility savings, in currency in to managing promotional fuel be maintaining expenses and optimizing Despite declining innovation in discretionary and and the aggregate, address spending, plans we productivity top the organization. are capabilities, messaging more portfolio needs. changes tightly while that to outlook, taking ensuring decisive to efforts to macro while

currency and and of both the largest outlook net of updating adjustment all and however, culprits XXXX are U.S. year are, is for pound, transaction margin operating translation major Newell’s our exposures. on in which sales, appreciation We the headwinds. significant British normalized normalized among are euro, the the dollar, which of EPS Japanese full resulting yen The this

XXXX current Although and actions currency over it was rates the ago. foreign to about based $X.XX expected on we than through time, is transactional the months pricing mitigate worse X do impact expect for headwind exchange

from versus billion XX Let’s in specifics go last full growth relative billion, to sales year single-digit which about excluding to We to in flat growth income and the the $X.XX core operating incorporates Yankee retail mid- category Recent and year operating implies exchange, Candle to currency the headwind is XX $XXX to constant points for improvement sales more forecast $X.XX net divestiture contemplates stores. the business, foreign normalized outlook X% of dollar basis, a points, to normalized the both margin to This of the nearly X% about normalized XX exits contribution closure of some net sales operating than prior guidance basis CH&S outlook. XX.X%. margin years. of updated XXXX. respectively, from XX and pressuring by and in currently XX.X% high basis The to on a forecast to the CH&S of strength

XXXX, We $X.XX percent $X.XX and including the in rate double-digit low shares are to in updating tax $X.XX in outstanding. X% versus approximately decline earnings range outlook diluted the a normalized share per to

to dollar the are next year-end of revising potential as at flow wave prior early the reflecting outlook to of to cash Project million, year. for Ovid well incremental impact relative a the We range ahead million second stronger as the implementation forecast of $XXX the of of the also build with change inventory $XXX operating the

decline For sales sale impacting business, quarter to well retail X% points. are core estimate from X% the orders and the billion, is of Yankee forecasting exchange, sales QX, category approximately timing stores. of the to customer QX some we a that couple of core CH&S first by Candle as We this $X.XX from net unfavorably shift half of in to foreign $X.XX as an closure including of exits billion X% sales headwind the

to on to gross sequentially to in normalized to de-leveraging stronger points XX margin operating sales ratio as performance. to margin as XX.X% We basis year-over-year well contract overheads A&P expect impact increase XX.X%, reflecting and XX year-over-year a

a to in single-digit normalized high in reduction approximately mid X% tax and normalized in We earnings $X.XX effective percent $X.XX to and benefit range outstanding diluted the share rate per the forecasting shares range. are

operational confident in delivering while that discipline our organization have agenda. on a strong and are softening the financial we environment to through successfully us strategic will We instilled empower macro the manage

a We runway let’s creation. the up see ahead answers. value are to for excited Operator, open questions long about opportunities for and continue and

Thank you. question James. our Olivia [Operator Instructions] And first from Raymond of Tong today comes

Great, thanks your you they last. wondering are was you. how little I obviously, there And you the any then if where few about selling a think consumption not talk of and now. and disconnects long will could major necessarily versus bit a the retailers most acute spot and are that right in

are So factoring of what the retailers? your second practices challenged the more have on half? for them Thank And in any you in you. changed you

Olivia. Hi, good morning,

Prime that of on gap beginning thanks businesses Home little the having some side. into that ones Day we last sales are the are Clearly, consumption Home and is are robust. as challenged was our the very some first going think year, softness are a that we And on Appliances, see Though the me half consumption. the – sales Recognize, great side, of I consumption Fragrance, between have, growth. of and the issues. in So July some we consumption same course, pickup to happened, businesses are this let to some in so year, there start a consumption of some seen

that going so is we be least happy positive. is see through at what – to is that in there we’re and July work inventories I to I as that the think, uptick, think look, So

year had on that enough, through just a we retail we’re lot me or levels, second below. up, in-stock retailers Look, the maybe slightly it comment we’re them still last and their Let – in supply low because we trying of and the of and us, the going year, second inventories. talk targets into most get this interestingly challenges kind to question had of at and actually for But varies. cases,

we’re hard So that. working on

in on notwithstanding terms see general I the our businesses. own for of think headlines So don’t merchandise you all us

you In you shift hard and bit into the that little stuff, from we’ve fact, when been think writing about to as working QX retailers, provide know, QX. a

of overall has get including are So looking even competitors, not be may as we up an much inventories, look, caught been not they us, because etcetera. But that do aspect though at issue. because it

we could aspect of it. up So get caught that in

is start so Look view sort have. great the – are on off matter of but of we that’s BTS. a And the the to fact I that

on roar. the Our And of our half commercial has really food, of business been some and is part it challenge, while was on. a real first big stocks of so a out

So there second as in half. the we pickup expect some well

you on sort on It And could of the for things the path bit remainder progressing three are the impacted? potentially great? could you with you some the color year, then Ovid. Ovid-related if color on us of be if just the savings that flipside forward the containment on could the And in in terms and respect update give terms businesses of little Great. the would offsets programs, plans that with then sounds like make to to more that in of July respect nicely. the cost a it’s quite Any

Yes.

in seen to for. our we’ve orders, on products. planning We’ve off shut minimal – regard ability with ship and turned mentioned of no receive as gone prepared the milestone major and dramatically to old process on July remarks, So live with as our orders, into we going businesses single new the system passed, And were first X. system, we to wave better entity legal a I we very frankly, than it’s our issues expected seen the

up terms with our program to was retail Our and expected. facilities – perhaps come most of importantly, terms. we have transportation customers going working than and speed the with faster And parts the this to one big of harmonize retail payment

with of same them negotiation process all terms. or top at vast the payment payment are were of down we retailers, cases, on the payment shipped sets terms receivables and we’ve time. the of our And retailers, collected system majority with ordering. We’ve and new of now XX set XX that many of many in products from cases, in sets different completed going one to terms So

So I about very are we think it. excited

a on the the on think as teams much that the previously. it’s the early the going the impact, really of legal entity come With And remain to sets into is to to come from think we the And to all in it regard that. us we’ve we for day neutral had I and last savings on fully to XXXX Ovid mentioned very integration done and I mentioned I remaining financial work versus businesses we system have that be life the testing to get testing, hard track year testament expect year. up well the in as this previously, model, XXXX. relatively the with Ovid new and

question comes of from Peter UBS. next Our Grom

Hey, good are everyone. good I you doing morning. afternoon, hope I guess, well.

I to environment. just or demand, to to wanted your many sales just in maintain confidence or kind competitors guess comfort in their around of your reflect core the like outlook the peers etcetera. the it I current ask I So dynamics, outlook the changes have lowered mean seems of inventory

comment degree guidance So from deteriorate flexibility here? of on can the comfort in demand you just should or your

and then So Chris add. let me kick can it off,

baby day is from as it’s certain a on discretionary. – essentials, our I misunderstanding when needed in things then whole actually We little everything think writing up. of There business, back cycles, terms really economy have the it’s Peter, are businesses. and track So are other a sometimes about of it’s opening lots the thinking in on that business is every there And we’ve is that a really where standpoint. Commercial – than school got

were a the lot me, during So now lot Home and stressed, out say people I the up hit Fragrance. way as are would than of were their they was been side because a other They working there That’s of that. has of cameras. using building pandemic discretionary to been

there. that’s consumer Home as been of think well on I a on happened clearly, the was and on. stimulus. bit And So there by with the way, And stimulus some then that little so the because Appliance, candles acceleration of purchasing

got doing home Writing and be out. some And the out we’ve with consumers people is Some then I low-income coming it very with we long preserving well, got a Fresh cycles should then Food emphasis those the got category, well. have difficult. shifted to will business, continuing to get think from is got teams DuraLite in we the do a into we’ve whole And the But are a came I think shares – is We’ve innovations strong. of extremely coming back. purchase appliances, story. will marketing be been that – Rubbermaid not whole and lot doing of we’ve In the there value well. that probably

giving And we of that’s instance, you So going for – extremely to the we at consumer one FoodSaver much. looked we just got a $XX leading at said, look roles were appliance have We’ve in think that chains. introduced too well. sort hey, when do input FoodSaver, of clubs and we

and we’ve reduced so that price And got the down. points

things going impact. a And so is have positive Bonus to that like think packs we on Sistema.

We’re looking on BOGOs Contigo. at

So message I stimulate value think that also consumption. is going to

X% where very – growth you first XX%. and about at we quarter first look we of challenging top on sorry, we a feel – a the had I’m So half comp when the of where still

So half, happened account in with shifts. we what into taking into second the we’re – quarter, the taking the are second

I’d say the we’ve guidance And given that appropriate. so is

heading is The beginning we contemplate that add categories I out normalizing, year of coming year stimulus as did thing did this mentioned. Yes. the only the at and Ravi money would the that contemplate gave into guidance

the the for had we what our into the to largely, portfolio power effect maintain that we this will company. plan I us versus And – but total factored has the year. is this initial year into say the plan enabling changed of thought, so the what’s for

plan our to the maintain and for expected, and we than Home but those are Home Appliances little the we on are would the say offset, than I the core sales and we relative beginning the of expected, faster doing think year normalizing think us Commercial a at Fragrance year, guidance growth. Writing allows to better of which basically I two

the just have what embedded your largely visibility orders in in on of items. guess on that categories, it. helpful. for orders I fewer cycle But then of or in seasonal guidance back-to-school? us inventory just some Writing, reason replenishment in you replenishment is seemed the retail you And can for at discussed these third Got replenishment? And when around guess have to would have resulted and any replenishing some commentary remind the certain the quarter That’s but normal I I on you ask dynamics of

– replenishments. in early too it’s Look, are it’s now for right we too seeing are week we but BTS X what Yes. positive, and is

I think that’s really more that. seeing late August, September that you start

Chris, you do So to have anything you there? want add

No.

exactly that it this did did remarks, his would Ravi say in mentioned retailers is – is is The recall I right. order prepared year. Ravi thing we and writing earlier think that only I then –

in we year there of of the shift display QX front so And those the a will the back-to-school from be Writing a volumes because into that in business QX QX. will disproportionately affect half shipped lot

And with strong, remaining The are share good, so... is the we’re very positions are business brands and performance. and happy strong, very the itself

of next Our Andrea JPMorgan. from question is Teixeira

follow And retailers assuming Good kind on rates add to Ovid, sure beginning them the with with reconcile – just just the of you. inventory. retail, Asia had enough worked and make level. your at the being Thank to had that hoping your worked course, that with the But to I anything are sell just Project us of to transportation afternoon. you on, remember since about strengths I’m I your inventory I of reopening? outdoor on quarter? And that not items, should and the the pull retailers out the have the help. of help inventory discretionary that Thank like can like season, question the camping in of the sell you some understand the trying back-to-school, third kind also aware benefit you. forward inventory, be going should we is of about what, those benefit be there and reducing of this Anything that how just we we about thinking business, terms to categories in results. they of was I the advantage. wanted for the that and thinking all FUEL work of talked one at of do just from Peter’s this issue whole in I guess, think in you up from

Thanks, Alright. Andrea.

try give shot. a me Let to it

depends retail we how earlier, And think, of of about But monitor our on coverage at product exactly on So a is good which our overall. data generally inventory we and levels I all our It pretty retailer. much we the see can lag. said feel of about at major retail we as customers, X-month retail. Ravi get weeks

are at We retail elevated. not a position broadly inventories where our are

mean sales our categories categories broadly action. look to that levels a with we have that if are in and below at where up does. have catching and still got a But we are bit to guidance still inventories why are levels, I XXXX, the quarter be our of guidance, regard general would we point. not above. mid typically compare are on out takes say, would major little still up. slightly because we sales their our caught very because to But get we that’s up, with retailer a line, broader XXXX we than do uncertainty shape inadvertently if retailer growth caught of broad our digits inventory do a something we high-single up you inventory some to in in with retail may closely. you It couldn’t we but you We to of our because we core doesn’t core QX versus is forecasting and at make QX where range because who And merchandise are we first sort that that QX some looked we speaking, And supply monitor our retail an caught And up constrained inventory a inadvertently are change frankly, target get levels. retail retailers range that’s good it inventories guided

about I inventory levels. So, would that’s what say our broadly

to am back-to-school, of don’t I back-to-school, those terms we the also in need assuming. The about And worry that’s super dynamics, helpful.

– Now at where for first year is we have and shift that retail. actually we And have the customers the little that one accounted the half what QX have I too ordered ones that’s about. is of have earlier, by probably from we mean are into the inventory talked the of we the back-to-school, – displays

to constrained replenishment on set to we earlier, Some back-to-school start. and But major orders. retailers a of supply the we are up wanted off good are

are on customer with anything if ramp so, that demand. we trying to business production keep And up up to capacity

Our Grundy question next of from Jefferies. comes Kevin

Great. Hey. Good morning everyone.

First for question Chris.

where the that line. a just our just the a raised operating and ability to difficult guys modestly last I FX, the And then say on leverage then was is of be and have lean that comment the pricing, you environment, a which Thanks. imply EPS even back comment seem the on line within better. would understanding held EPS pretty response, what in of productivity, some transactional to would guidance, versus and the certainly on about Maybe then top versus touched on the albeit half And that guidance, from maybe larger, be buyback. down it, seem Xx effects follow-on on impact was to I to half the constraints you on strong that margins particularly think Just year first of year, around year.

Okay.

Let try at me kind time. to of tackle them one a

and margins in roughly you that why impact from flat is of being year – productivity a and our offsetting FX. dynamic think the a talked inflation saw pricing gross pricing margins, being lot I on the we we have ago. about implemented, now FUEL think which quarter fully second the with So, savings the And

year, Going expect forward productivity the into and more impact to savings we of pricing the FX. back than FUEL and the half inflation of offset

improvement continued And so In expecting are expecting half. in the levels our we to back a years QX, we gross prior up to ramp are A&P margin relative bit.

this revenue that’s because of base the because the is in happens in that that year. nature spending level, versus an And of A&P in half were frankly so overhead so front-half sales we half there year were planned year primarily that’s loaded a happening percent because the lot a Because supply for comparisons, a year back not back deleverage of ago. higher but the then the I is somewhat on And as of in thing sort the is of track type ago half we in constrained. the other back a thing, growth very A&P much period the one-time more think is

– the margins. to all on new has XX are together on last news points. up we that operating year The full points where on margins basis of of sort guiding XX that’s versus So, us and margins basis year

And U.S. margins pound, I as the Japanese FX has really versus devalued new British for dollar well as is exposures the on biggest I the think news the the really Newell. significantly euro the the three mentioned, impact. impact FX currency and the are as is because yen which

that result, the of as our One our dollar China, companies is of more the exposure aligned a where are transactional States U.S. CPG than of that renminbi. bigger to manufacturing much in United in the we is our U.S. many have actually or a And regional is manufacturing setup plants sourcing. the other things from dependent base because sourced which have

hard in development, productivity international plans but Xst. we that with but FUEL the the recent so develop it’s to a that think And XX that the FX the plans plan into pricing are our operating on made is by margin – bps relatively now of given transactional that to adjustment effect playing our or January transactional pricing the regard beginning impact to not pricing lot versus in I we international going entirely markets to savings. explained markets, year probably the we what bps go an is is our really working underlying the will a this we of will guidance around And say out, issue into the change see XX in

impact will be of year than a this more next it So, year impact.

for it. Got that all helpful. Thanks Chris. That’s

quick Just follow-up. one

on Just share updated thoughts buyback.

macro. some certain on being defensive sort the said, of nature within openness open. seems of you comments the less the of certainly that But sort made value territory. about is expressed of Ravi, business. You deep more context is stock Board of the that a in this the misunderstanding perhaps The

how As on. love of And you that to weigh to within on should you would pull of sort all on returning together, thoughts will you. these get shareholders that updated all of it Thank I your pass and variables. cash

Very the Board know, the CH&S repurchase. good. business, Yes. $XXX you share million when authorized we We – of as sold

current executed and have on million authorization. $XX the have we to-date, We $XXX left million

have seasonality standpoint, as our typically The other because back is seasonality are half results, thing of the from of business. I you a a we generation would seen cash company say in our

billion generate amount $X the we company cash so term And to half a the and authorization to will we From when the months strong to generate a do expecting the cash over operating year, of in flow we operating of or deploy are continue next back longer so. this perspective, of to significant six evaluate expect flow.

are first our seeing we for expect invest looking are of rates in is be opportunities – we the XX% We business. use what to cash invest And at to CapEx. generally, of to type return at

maintain. to we Beyond will winner pay in that, to we return acquisition. a strategy. expect have tuck-in cash we would on share we which would share, the look acquisition, that. that beyond clear for And very a us generate value we I think shareholder $X.XX that, that to we good then to which or dividend expect consider very repurchase through it as reenter of to to was something And said But selective be past, a be tuck-in shareholders have

Truist Chappell comes question from Bill next Our of Securities.

Thanks. afternoon. Good

Hi Bill.

seeing U.S. consumer board. being Dwight not Most the happen healthy I guess very this listen saying kind P&G to, have on and call morning the I talked about of down Church that the across to, we trade seen

which consumer low-end based what based that are reading recession pressure or economists is with context understand and year down, to And in or of maybe your that expecting. expected an seeing are on so – seeing trade just right the to what what are under Just understandable? comments what kind of trying you that versus on calling putting some for you you for half is second the are and of is expectation a now, be

Yes.

the fragrance on that lot the purchase. the on definitely stimulus is work, bounced seeing of discretionary out that more business. have And really we the consumers is a up. lot of a Bill, tranche So, also done and a losing But clear. home a lower-income of we that modeling probably are and the And

new come track So, have lost a consumers see we of able to them. lot are that we and in, and

something are seeing. definitely is that So, we

trade the down, types. there On different is

is, losing hypothesis say, the of interesting label. private One to

with their home fragrance. category, actually not brands But main is big which fragrance in where one of private that the lot is in seeing to portions, there that own seeing of exception in look, a from We private are retailers. some label, Rubbermaid, the susceptible aside label, even of are not again that. the home And from we

give is is I in value if are positive. a the We sensitive shift car – will holding you which very are brands, which trade sometimes the examples, lower sort to – shares, of of a downs where kind two you seats, there – one baby a some There will. segment, with our is so

we brands to we some are the of So, careful. But our innovations, but we be one tend to of like own have that power because that holding our see.

see saw targeted So, And very a we because we promote, we like – per are we have – for put minute we do Day, so Graco. of when four very and on are big map policy and car seats sell in, surges. of targeted instance, Prime we Newell

are very the and being understanding we sensitivities laser-focused we So, on promote. when

brand we for are on ‘XX have down, on. we are being promotions retailers, we more first of their getting for benefits. on some Coleman, side our big actually of specialty so where trade Like retailers being And – we door, the with beneficiary. included the the time and the are on instance, value other specialty The of we the are in kind also for

So, seeing. that’s are what we

the are our behaviors. my teams on with trying thoughts what so I And in looking are stores markets and seeing. check am at based to we always

of view. that’s So, the quick sort

further I add consumer. our that softening thing The I is of low-income guidance only think would contemplates a

And to inventory. have be little your we versus where to get don’t of the we want in what position a are expecting. seen we what we in what chosen point So, have deliberately think we we cautious to overbuilding that are because more guidance seeing bit on to-date a versus are I

the we we based a a plan at the of over so we future lower good inventory carry what trying excess we be year. cautious far. supply end next so trends inventory have we and year don’t to to position And as have little And tried on we the to in with that go up so regard into wind are seen set

in trying value offerings, that pivot on views, have, terms, From have is all made value, about promotions. but price, marketing quality it’s demonstrate is attractive company to search it but for them. messages – the with really the one with making low all value, great that our we we in It in product focus and value a value. not that is the combined just about And really as

year to that versus we I follow-up No, I XXXX back tough – clearly XXXX to year-end but you expect writing, you is years? I going to just going at normal, to then not there, expectation that work, stand, going this surge have levels? back-to-school. or year? at appreciate there that. you are back expectations and sell be it’s back versus normal. a mean fall you normal to do at even see And where Are us we on had do maybe in How to we kind where mean to we an are the as be look do into a of have most next XXX%

business the Staples which as our I a hybrid, seeing from momentum versus even we with would Depot answer and Walmart well say Amazon, I the have are up. Bill, And that, is it’s going on seeing very we are Yes. and on are customers etcetera. strength-to-strength momentum, as the is regular clear though opening and just offices writing

got side all we in we definitely have are ‘XX based we are on versus the say we some be would So, activity new the positive that with innovations I the that would QX. driving ledger of of and driving that

has thing, overcome knockout well. and item. one Dymo, – Mate So soon with a and as Paper be on that I another as that feel other in – think growth look, the S-Gel, chip future, we the I success. doing Sharpie been very will shortage

would lot confidence. writing, I say of So, a

is next of question Carey from Wells Our Securities. Fargo Chris

Hi. Thank you.

question. quick picture then a question So, just and bigger margin a

Are sales we Just forward? kind that & And high quarter. similarly, the deleverage? atypical a there? Home margin, quick about improve segment, then which margin Development from in in reaching historically is a just thresholds the going new on Then delivery Solutions low Anything historically follow-up. of Learning just to was margins,

I So, the again, – am sorry. Steve,

So, – Chris, first I I missed Home margin, got the the part. again, Solutions

sustainable see going Learning & or anything quarter, high, atypical is historically you the that as Development, over forward? something that

Yes.

writing Development, strong of translates top So, that function FUEL we those you savings take are across I Learning & business. And a baby, both because let me both driving. improvement think, right. really in through that of was strong that growth margin into are productivity and line

it’s – forward. is I So, think it sustainable going

had sales percent some and higher gross plan, started manufacturing cost right-size we the a get down of the of to deleveraging that on think in manufacturing, I margins There really Solutions, Home some of from the during being was line was to – because some quarter, There line we we significant top was slowdown. also that. spend the absorption supply normalizing. and drop On as issues because the fixed margin started as A&P largely a the top

that margin Home drop So, don’t Solutions sustainable. the is think I

going bounce forward. of sort to thing I that’s think back that’s we a go temporary as

the a maybe bit your guess outside clear pretty trying that and environment. on is of own something lack visibility get forward. at and good But of are the you stock It’s the a significantly challenge for control. general overhang Yes, Okay. of might am sort on Got And way looking a what if you is define that’s in it. big big of the a to of not Then in demand Hopefully, going I results inventory is question. picture. the merchandise I more environment resilient. this are perhaps this changes demand success sense your guess that as the that I environment tightening

control. You you more flow, is on cash that something back maybe buying which can’t focus stock,

if on right this right? positioning to the this execution so so. it and the look delivery for the Like the does are call, in in at feel on curve? of and what a context yourself, continues end but stock of soften, that’s the the demand demand, successful picture, of far way big realize question is lack visibility year, environment to the big this the for important Just how I business or you go-forward yet still

teams you I with and at think will quick it. one, we promises. I that supply the to one COVID, then then Chris on in execute, challenges, and demonstrated, think where the then same have thing are I can XX our inflation, demonstrate continued Newell into deliver turnaround, chain and FX, gum the have give add can then a last quarters, has walk the now our been experiences time. Look, And we starting to to

So, is agile and we it recognize on that of the part being But tougher. quick just environment is look, pivots.

line to and make side, how sure the is On it do innovations. to that pivoting continue value see the the our you really to continue top drive consumers

we that, are So, – year was declared we continuing to margins. we still guided again – despite this but on will that’s the everything, year do we we margins, will of continue to operating have that the and be higher

right up. to going determined are the very to on continue gross are we it margin and we get to get Long-term, that. very So, focused be

to for to going cash, we help is are both. uses to do Chris out pointed one outlined which us is And got there have So, I we ‘XX. look, continue it. as to And if Ovid, in got which finally, already then generate a have us, it the but is we think gives be flexibility. and – real And Chris – going focus, of

company poised this I will will just But finally, So, a think discretionary, thinking investors would actions shareholder is to and speak for is portfolio, long-term And the to this say, value. little of we I but repeat it’s, themselves. I yes, it’s continue our think not. portfolio, have we But results misunderstood where to say, going the – drive and I and to hopefully, everything want a power – to are it. don’t continue to is

the comes And Steve of final question from Bank. today Powers Deutsche

Hey. guys. Thanks. Thanks

said, questions gross they the there what them, Chris, is outlook, and be my trajectory. want back margin half the clarification is So, just are more but clear are on on three you quick. to Number of one I

said you I in – what’s would on sequential improvement there in answer. the having great. I as don’t if cash just is – or then XQ comments I I out build for come more different? third rollout. there interpreted year-over-year am more know as that Thank versus don’t XQ cadence, you one. purposes. I bias guidance clarify just there change. flow XQ called there driving And easy I got additional an helpful Project in of number flow you. of wanted improvement That will the improvement inventory be I any clarity you rate and benefit of half versus would that sequentially explanation be exactly a Ovid Number lastly, in on as I the to the XQ the – think back your the be to allow ahead that, cash tax quarter. guess if just the for But two,

Yes.

was me expecting were We year be I gross flat to I year expect in improvement in let And down one were back improve rate referring a So, of try QX. ago back half. ago I them take at the to a margin in margin, am the versus On to up margin We time. in what gross gross was to a QX. versus half. the

on, that from So, are QX. expect in to on QX is in discrete are we that project we to tax benefit one. benefit guiding implement answer tax that’s a tax The a the that that one-time we working

discrete that that is appropriate in tax we it have one-time so a And it high in reflect of execute of got like to a was confidence benefit guidance. QX degree sort are felt to to on shipments the we larger going QX timing then and the that be with cash timing cash in likely the are part than has you QX, flow of that and the of think And of I do collections. see in and to flow, the

same this Newell, case to so And that for trend. typically, the that’s of and I expect follow sort year

do flow be larger expecting But significantly I that I think to cash am So, you than see QX positive. QX. quarter QX will

of with on we the rate? know of cadence now. XX%, the question Okay. and way just discrete people me talked have approaching of any normalized What’s because in years, range. because about the long-term are the on better is upon of a We next couple over that pick kind But it there But tax a couple past but benefits is sort I you topical right That’s normalized to I right the to get – of helpful. there, that’s tax describe keeping sort tax at it. end. just the got below

good a come continue they for legal that rate – don’t Yes. we structuring we linear all with to entity going somewhat have the our etcetera, and after of our is In are think are tax tax sort fashion. rationalization, company, value opportunities drivers because we work, that NOLs, in volatile

If the a that around that, rate for little tax might said structure. I to in up normalized a tax existing rate number company, to now. that is the I think wind actually in about I past, high-teens for on excluding below have being that XX%. may normalized discrete maybe bit think I our items, a I this company were would this think it, based XX% be probably probably say

disconnect. gentlemen, today’s your session that XXXX concludes you quarter for question-and-answer ends and Brands’ you We participation, and and now Ladies conference the may call. thank all second earnings Newell