Newell Brands (NWL) 28 Apr 232023 Q1 Earnings call transcript

Good morning, and welcome to Newell Brands' First Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After a brief discussion by management, we will open up the call for questions. [Operator Instructions] As a reminder, today's conference call is being recorded. A live webcast for this call is available at ir.newellbrands.com.

the Relations. to turn President Tsinis, now Investor of will call Sofya over Vice I Ms. may you Tsinis, begin.

Good Newell earnings Brands' you. first Thank morning, quarter call. everyone. Welcome to

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

call, I you to the XX-K, statements. I'd available of involve today's SEC Investor language to risks in may and discussion factors Actual and Form further will our filings the we and XX-Q cautionary our course begin, Relations that differ affecting factors refer a the statements. forward-looking and outcomes website we available on forward-looking obligation to our uncertainties. update like risk earnings Form Before be for undertake other materially, you release, making inform forward-looking during of we which no and statements, results

were presented to today's will investors, today's and non-GAAP measures. as certain to Please to with useful these remarks measures of non-GAAP GAAP financial these recognize believe be not to between tables reconciliations We refer SEC. available also referred including normalized superior considered measures, can accordance although the and that should to release they are be those the measures that found measures in non-GAAP earnings GAAP. in Explanations measures furnished and non-GAAP

And you. Ravi. now, Thank I'll turn to the over call

to quarter call. first remarks and I'll our Thank welcome you, everyone, Good Sofya. my brief. morning, keep

call results Newell you our is take Mark and for earnings Chris As year. will Brands. of with through This the outlook and my last balance the

history. on will first May for a take company. Chris in us, February, CEO This recent event we is As Internal in that over as of many be next will announced know, and Newell’s successor the Chris of retiring the I'll CEO be XX historic as the you

the succession well two to fact, thought process. a In testament planning it's decades planned well and last in out,

for markets as as and seamless, Over Chris with by a time Project Phoenix. to the and a opportunities international this we've past Newell transition assembled our that I'm environment confident months, several of will us next orderly ensure to through along and world-class term successful the I'll long brands. the the spend couple well take with I'm past our of management get the smooth execution difficult our key years encouraged also team, partner over Chris, level. closely in

pressure the considerable on optimistic our Newell I'm the While future about environment has macro business, brands. of put

the One still the Over stages as of Newell, years, the company. are of in come past several we truly early we've together scale the but leveraging

team processes consumers drive customer strong have are passion e-commerce with leadership that and reigniting executive we both great and love. prowess, We brands a innovation. meaningful to excellent world-class With omni-channel the and relationships have

job Our and through operational systematically reducing Ovid team has on on done Project a we momentum excellence complexity driving gaining are superb and automation.

a upwards. and one ahead cost I'm employees thank as talented asset, I'd the lead as our privilege execution leadership well over model. onwards me in thank are truly It as last just Our operating company team. efforts are dedication, number for us, to the for been of and to of distinct grateful and is efficiencies not and best the we truly like several trust their and honor their that a implemented Phoenix. change about employees It agenda has years. our new are days and their entire the and confident Phoenix of savings. Project part is we've continued our resilience support

to And I now Chris. over turn

everyone. morning, Thank and you, good Ravi,

line expectations. in were results quarter First with largely our

exchange half cost The anticipated, QX. of in spending constrained a persisted under category As fixed consumer and retailer in period the the normalizing line for difficult and from pressure. categories, faced discretionary foreign headwinds back destocking, was company XXXX very trends, this top into bottom to Newell deleveraging, significant inflation

there were year. cash bright spots, relative last However, stronger flow performance several to including

operationalizing also build and to excellence During QX, progress Project made meaningful and the organization Phoenix. implementing operational transportation across distribution Ovid benefits the and continued Project we associated with

on additional initiatives. perspective Let me both provide

you transportation businesses. food recall, go-live February Ovid the Project and implemented may our Recreation been wave distribution now we conversion and Outdoor well the is fully second as across the categories X, of & Writing, on As successful has as centralized. remaining The commercial very and organization

a are nationwide utilizing mixed and North centers two operating DCs both new network and of Carolina. Coast ports currently model, the new East go-to-market distribution including multi in stood in We the Coast West Pennsylvania node we up via

days, early model in benefits delivery the improved cost realize reduced the to year, fill times last of and meaningfully we from to clear the a While relative first it's to we efficiencies. sight quarter, are new line have beginning still in and rates

operating significant represented unlock the and strengthen complexity, a by implementation model, efficiencies quarter operational the in is period simplify First organization Phoenix, our Project which savings. our expected crucial of scale and to drive reduce to further streamline leveraging

Although, there pillars ahead work of key the quarter. we Project during made on lot progress is a us, first certainly Phoenix more of

organization, the talented operating transitioned growth Development, & Commercial leverage new model better into First, employees. enable organized company for the Learning three opportunities the enhancing and & Outdoor for us new Solutions, to we our and scale while of mobility Recreation. This unlock into segments, Home the should

for win-win, Newell we of a scale to our Second, with sales model partnerships the customers. moved enduring top customers four our harness while top One portfolio our to building

customer a to to their and improve our selling partner. as to are major a our simplify experience products strengthen unified our position customers We approach interactions, significantly bringing best-in-class

Canada improve efficiently One year, across Australia, distribution same us Japan. year midst the We our Newell approach and gains Third, which New in to of last America, international One and more the a allow should approach moved drive to we go-to-market operate Newell are go-to-market in Zealand incremental agility. a did this in key all geographies, in implementing Latin and January we of

of the this markets year. expect and by complete end all EMEA We to other

manufacturing chain Newell’s we have the supply Fourth, centralized of in center excellence.

into turn scale and optimize manufacturing to advantage global to the about a company's network. the our manufacturing excited competitive are We opportunity

resiliency, We to improve culture efficiencies, our and a collaboration, and organization customer cost chain supply to and the partners. retail believe of our connection unified that position scaled service best-in-class technical general merchandise continue global become further supplier strengthen chain will us company's to enhance capabilities, significant our a supply drive

As during footprint, throughout our and environment. the we three continue work our shift are to expect tightly towards estate and given manage costs additional first we all also real office the closed hybrid years. the quarter spend, We offices the aspects upcoming assess closures of analyzing particularly

the pre-tax achieve implemented. associated range We reduction million planned are the with savings Phoenix $XXX Project fully million $XXX to headcount in with track along when to the on annualized

in of Careful consideration every and several with the balance process the past decision gone the the employees have market. spending. The planning relates already our have the to depending communication to macroenvironment either for on and into particularly cautious confirmed consumer it on as our relating this individuals months complete impacted stance year, or to discretionary

macro Our slowing views and on are debt moderating indicators upon household sales, persistently food, housing. inflation although such rising as essentials high retail energy as predicated and such

the we're are We wallets Europe. trends but share purchases. to and prices stimulus everyday discretionary in not spending expect goods weighing only directed consumers' that's observing consumption government with factors international these in similar U.S. Elevated on the towards of markets, restrict on the rollback along particularly

home demand from stay home-based trends during benefited normalization categories continued in We across pandemic. the are at seeing that

for pull we we these to many behavior Beyond as this may Also, through of persist potentially Retailers term. Bath and & purchase this you to near our indicated this the in to inventory of have seen protection longer assets. of have the Given products and perk week, selling cycle their pursue they on double for general expect the may filed persist bankruptcy expect merchandise one behavior year. (ph) customers continued off back levels a Bed earlier path

Brands an we do for They retailers, XXXX. While than in on in Newell’s given X% customer for were light stand. they some on XXXX, where comment shed of we individual typically important less sales accounted I'll Newell not

took credit we year to exposure. steps our situation, eliminate last their largely Given

expect other proactive slight to taken, While receivables due this headwind inventory risk we the and to retailers. a liquidate be for as minimal the have migrate to we've we on they actions do shoppers front Newell

largely backdrop, guidance for range. results although, our the a reaffirming outlook XXXX, company the of there's are uncertainty with our While expectations, to the QX of expect we now macro fair end surrounding we amount line in lower be with the towards

We expect Newell’s the stabilizing be year to for financial performance challenging improvement. continue to foundational committed this remain a company to driving while and

macros as goal and company growth return to improve. profitable is Our ultimate to the sustainable

the We last are against laid earnings call. focused on out on five priorities delivering laser we

flow consumer continuing sheet First, balance managing staying and strengthening close carefully and forecasting trends. and Newell’s the inventories, right-size to cash to evolving the process customer by

Project Ovid for inflation. and improvement margin savings, fuel further our benefits, advancing automation operationalizing gross and driving currency productivity by Second, initiatives, transportation accelerating and pricing distribution

Phoenix reset Project Third, tight driving transformation progress Fourth, structure through faster offset compensation to the normal continuing simplification and wage to and the more inflation. enable initiatives. other to along levels spending And impact reduction SKU overhead count operationalizing with fifth, new controls company of savings incentive progress.

and updated set months, competition to strategy along on over priorities strategy. a have mid-May. win to the how refresh required of I as embarked which a assessment choices, to required of assessment this the the and rest team best-in-class and time, Ravi to with same evaluation At of capital leadership new mentioned and stands of a an strategy, the refresh well where entails the key As of several of the capabilities in required as talent the he full the ensure closely where to enact to play versus win support smooth I Newell an past upon in partnered culture the transition industry, allocation integrated our an have

in work months. track few our and We the share complete are to thoughts on next this

While we of to we strengthen I'm us the and allow environment, ahead optimize strategy, consumer our that of and continue our the portfolio leverage brands structure leading macroeconomic the scale years a very sharpen the confident talented our company. company employees challenging cost further fully as in will to face

on entire retirement behalf leadership, dedication over turning partnership well past would of years. his to organization, and and him wish thank several I our like Before the to for over Ravi in his Mark,

I'll to Mark. hand now call the over

morning, Thanks, Chris. everyone. Good

end our billion, largely per share sales Let's both going within earnings albeit CH&S $X.X lower in to the exits. expectations, XX% core Net category and the at a business an from the year-over-year from range. into jump sales, were QX divestiture of straight normalized reflecting and a results, and X% sales with currency impact XX% consistent in which guidance, of headwind landing with core X% contracted certain decline the

basis, an bear X.X% of core QX in sales While happy of period mentioning in stacked decline that are levels. sales, comparison. QX during difficult not versus was sales and particularly with up XXXX, against this core grew Therefore, XX% XXXX were base clearly a it core we does on Since XXXX. a XX.X%

margin to as normalized points XXX last declined Newell's basis to versus XX.X%. XXX basis year points last operating contracted X.X%, margin gross normalized year versus

to more carryover Fixed of which impact favorable a line These due softer going than are costs from margin from in cost top drivers efforts, slightly last inflation the our of our Phoenix the ahead inflation with largest including year fuel pricing, along QX. productivity in were pressure offset deleveraging factors and tracking Project expectations.

last while benefit primarily improvement per diluted $X $X.XX versus debt which the a was an a to still use Net $XX million year. cash flow versus From out normalized quarter. increases tax loss and $X the cash due was normalized the standpoint, to $XXX of in netted negative to all interest million last was million nearly interest million during rose of operating and which million, expense of of rates a $XX share year quarter, for

the million in big a coming $XXX of improvement ago. lower than was year Inventory a part

progress, end was with QX in inventory increasing year is lower this at drive approximately million good rates. the need inventory levels this, to it worth while maintaining transit fill noting below $XXX while still Consistent ago Importantly, levels. is we or much order that of

This things. suggests two

sourced order First, we manufacturing customer material are goods matching patterns. finished to of doing job orders better production raw actual a internal and and

way through are balance the we is on counting system. already over working Second, the the expecting reduction its year the inventory significant and of

was expect to four below a times the credit the to to navigate coverage period. it times the of and end with year. company's company times this flexibility we This don't this our X.X X secured X.X QX end reduction and ratio sufficient Anticipating we provides quarters. the X temporary from The at in last ratio we leverage of interest amendment the until be next month, revolving challenging through believe times for agreement the

X% significant unfavorable sales Moving down due category back-to-school $X.XX same in have QX to currency to our as QX in on QX from quarter and that X% to core and Net operating writing due second to $X.XX as following. assumed related some Normalized margin XX% we sales on XX% outlook, headwind the a certain the with to pressure billion to well billion under of QX, exits. shift weighed headwinds expected to orders remain to a to activity. from mix

into margin operating this account, all of we Taking forecasting X.X% X%. normalized to are QX

a expect $X.XX earnings expense interest share $X.XX. in rate, to be high-teens per We step-up so to a forecasted normalized and tax are

X% full business are decline exits. For the outlook, the and core a of with headwind $X.X nearly $X.X a divestiture of year, certain XXXX billion X% currency, and our billion, we by X% net to CH&S reaffirming to sales sales from driven of category

by as offset gross savings to overheads to XXXX. $XXX Phoenix XX.X% improvement in Normalized or XX of flat anticipated million points more year, $XXX versus to basis despite is operating to margin be than last million margin Project pretax from down is expected X.X%

For to includes range high-teens well a rate our normalized earnings tax guidance step-up of which share as expense. as $X.XX reiterating are per XXXX, we in a interest $X.XX

Chris top operating the of end environment and incrementally range line as are as earlier, now the more to our on expect come consumer towards As well cautious in results spending. as low the bottom discretionary indicated we we

to driven by continue year-over-year We in flow, reduction a expect operating working in significant capital. cash improvement primarily

to million related operating million $XX $XXX anticipate Project Specifically, $XXX to Phoenix. of inclusive cash we cash flow, million million $XXX to of of payments

our XXX%. QX half. is midpoint guidance, front now the With back of full a cash that our we stronger hand, and much becomes with it the the line comfortably free bottom self-evident the in year of along flow At are top expecting actuals and year QX range, above versus productivity half during

it half we year. thought specific second the improve believe Given the be results some should helpful our this we to reasons reality, business would provide in of why

trade standpoint, on been macroeconomic we have with ease, general expect down. should QX amount slow should starting incurring year a be should profits destocking pressures massive much of FX pronounced from merchandise the First, less that inflation and last of we finally

it has to quarter will relates easier. more underlying during to period of which all represented half, third last as historically, cost help than half total our you're the And our destocking exception own the significant manifest Second, of with base starting comps fixed with aware, get quarter, company year, itself sure I'm second our sales, with much the as when absorption. business dynamics, began third

which we In our favorable. addition, why expect now to reasons patterns, one based back-to-school QX of of to a mix on sale about back from point order more should move is QX this half be the year,

Third, we the believe benefit half which will of already have place, disproportionately several corporate-driven the we in initiatives year. second

fronts. have two are productivity For biggest to our example, on ever we track on year

weighted. the to First, COGS our half it save relates of margin, back as initiative on we X% gross pace over where due to are to with being fuel slightly savings

the year. second overheads positive Phoenix, Chris Project have Second, should commented of which half bigger during already on a understandably has impact on, the

SKU completed analysis domestic of just in-depth a we business at our level. an Finally,

mitigate on showed analysis pricing is the unprecedented inflation on continuing level fully required we return basis. additional have in that impacts that to the on inflation are and underlying fix appropriate the products an because a sustained of clearly structural to loaded generating level recent categories not extensive years, of some of of economics Our

expect. this not in and concentrated and they so invest brand to don't third consumer the imperative roughly issues pricing Home able take retail in be it's worse. U.S. partners intervention, building perpetuate capabilities largely these that quarter. and Thus, our across the we will now understanding, U.S. XX% are our the believe segment action now we consumers we of innovation Commercial business Absent in expecting get We incremental address Solutions or an to

and factors, So going based progress we journey and on meaningful of our and these associated shareholder multiyear the sustainable forward. create back reconciling front appropriate to value half believe guidance, including reflects on is splits our levels reasonable

call the to could, you please if Operator, open questions.

sir. Grom of line question comes Peter Yes, or Our from first UBS. Instructions] the comment from [Operator

is line sir. Your open,

and good morning, operator Thanks, Hey, everyone.

category I context So in spoke your more get but kind since just we of last in wanted perspective I on just underlying February. what's growth, Chris, guess really changed of the to

back seems spending there it discussed or pressures, You like occurring discretionary but in already were February. those

just blocks then it's changed, got And So really that what's do the just a of back feasible? where around into go really hitting commentary guidance, any building so half I outlook all terms worse. in still appreciate is the we if but recession,

spending macro that's into durable is and a consumer categories sort categories cycles. and of our energy and out housing product in and what stimulus inflation year deprioritize on as And we're durable on that, pressure And bought a a the consumer food, causing of Peter Thanks, categories. prioritize of Coupled the Sure. of I Yeah. of consumers essential of in way, From in mentioned to effectively with a and on or -- discretionary a seeing them consumer big a the and good time. many have the morning. remarks, continued that our items longer categories. when more the prepared took purchase environment, function ago two lot for discretionary came market money market period really

in change guidance the weather will don't in end do on our for year. I we're our the a at the so sales a expect in seen, which the is changed come We've driven retailers range months wet declared & I lower That to prepared dynamic, market. a gotten, start the one in of since in remarks, Recreation, did due the season, maintaining XX% have of we range, And say we specifically, two major that I the that terms we mentioned we've which the on sort temporary expected that bankruptcy why western last of fundamental than I minus there's as guess, talked, growth. what's of got disruption think meaningful cold core really to off country. Outdoor of to part slower by and was to the primarily in

that the but not timing We the -- that expected was year, certain. on

destocking underlying destocking think that And in consumer the retailer really we probably sales half of I quarter standpoint, core XX% of then a reported growth other that dynamics half minus from and was retailer our of was about first the results, that roughly. sort of

largely expect think And we will the But so us. do have true, why we destocking were we QX. to get behind impact think by part of an we of that's that continue although on to the retailer to reason time midyear that sort largely it be

No. problem. That's the

So just XX and point, half terms of roughly to was roughly related that the last seeing was kind demand? clarify of so destocking to half just around underlying you're retail what of in minus

of And right. That's say wallets peak base normalization of period, would demand, the a some is, the pressure a that the accurate. as on categories result that's of I from result consumer as underlying of levels, but COVID and

Chris. so on. Great. it Thanks much, pass I’ll

Thank you.

from Your open. Grundy, next question Mr. line is or Grundy Jefferies. Kevin comment your line the of from comes

guys you Can hear me, Great. okay?

Sure.

Kevin. Okay. morning, Good

good Hey, guys. morning,

that. a for like moment. pivot to this cash I'd like to My kind about Sorry of line flow.

the of is the confidence push around reasonable. questions, million on So quarter say, how what's you your better level it's of cash expectations to year, guidance typically use to bit the of I course, million? visibility little of so of few and a or comment and come did light flow two, sort kind relative seasonally for -- conservative? tends $XXX versus have did and last the a for $XXX company. in I'd was it cash think broadly, one, is, Number the appropriate How pertinent. sort XQ a all be Number a quarter? the to

thoughts wiggle it. where bit given lastly ability not the you low where fund just then maybe right you're lot at the at a CapEx some end of I a of importantly, is, the updated range, kind look to of kind to you yield be, on room if and fund And look And dividend. when the dividend think guidance and could certainly little the kind there. in come at of There's of

be decision, think appreciated. Board an think thoughts your I it's a updated some understanding I there So would

thank it. for appreciate all So that, guys. I you

jump then piece, the talk question. of about your and me in can Let flow cash help second with and Chris the part

It's we right. really take $XXX million a in did being QX, progress cash about but year-over-year. So good basically quarter, you're there, up always have

cash biggest performance If bridge to you the all was better, was that almost working by for was payment Lower $XXX have differential get of a into of negatively a comp inventory. about year-over-year. management for probably million. capital was operating part million that want that items We driven $XXX it did (ph) lower income to comp payment, incentive the was better $XXX that about relate million incentive that,

another restructuring, several had items XXX some the Phoenix tax was combined that we downturn, cash for payment then Brazil which And and the higher interest.

you'll yourself bridge, find at that which do million, improvement you if the we was comfortably that So saw. that $XXX

basically you about at it think full period, going improvement from be a to million. the look flow it's because of If the working prior capital was again, the down year, $XXX cash operating roughly story if you

to the $XXX million (ph). $XXX our million $XXX If you midpoint range, take that you puts at million of

So $X.X is all billion working about $XXX positive operating to bridge from looking effectively, that take we're And about $X.X capital. I comes the of the million is year-over-year, improvement. billion capital income $XXX of and differential but working big accounting of a mean help. hurt about for AR with AP million size movement bit of little being the a pretty AR a AP that being and then balance basically inventory with in being of the

the the another out we're of the at QX, of to where course to of end come sit now From million $XXX right we throughout $XXX million expecting year. inventory

And my $XXX performance inventory heard the as prior our expectations. exceeded Our prepared you down inventories in in-transit QX remarks, the versus million period. already in

flow cash high but confidence it. have in We're operating a of the about watching it degree good closely, we elements. very pretty feel we So

remarks, to million CapEx and current have question your flow year and are the for kept of going pay the amount That prepared allocation we said, to look take mentioned to capital to dividend dividend look. range, the being operating that we we a which refresh, small be certainly, just And point, of To Kevin, cash part on my the the dividend. to flow going debt operating I'll $XXX And as on allocation million the in sufficient Yeah. the maybe unchanged is at strategy fund your company is the are as going of capital taking cash strategy -- I strategy $XXX the part forward. down. at

And strategy so we haven't that a share on but incorporate made that gone yet, once discussion the on we any work that we've appropriate through a will conclusion when and view will Board. with the

much. very the I you Thank appreciate color.

you. Thank

question next is Your of from from Fargo. line the Your Carey Carey, Chris or comment comes Wells Mr. open. line

Hi. morning. Good

Chris. morning, Good

Yeah.

gross Just of lot still a from a margin but little obviously, under pressure. sequentially, standpoint, step-up a right, of bit a

in half gross lift. the You're pricing clarify now, should which just looking margin bit trend to at Can give a you sequentially? you how of taking year a of the little expect the back

just sorry how backdrop. macro then but on are And the factoring new if you pricing, missed I'm the it, I

standpoint? about and how margins half the year? this that to to you So go starts from thinking on consumer just the still for sensitivity get things do you a it the program? environment you incremental out if with pricing back need through promotions new macro the weaker, seems that to play of of going the with So if offset the Are plan you have So the pricing. to gross any

Yeah.

look it a look first the kind is operating back line calling implies the the second and to gross well in be the big if operating of of op digits. for margin. obviously, business as two guidance correlated. you not in halves. So be in splits I lost that see And both we're for think at But of first obviously itself. underlying providing the you us gross at are tale we're margin operating a the elements on are help because the the half for reversal that low-teens. And to margin, we're the that and I'll margin flight, the then trends on the the seeing on you have calling the two the of the reflective let me that that It's we're half, margin you'll you of in all we what margin highly help if even And half, on we have from mid-single

XX% those So of look Phoenix from if example, initiatives, and look the pricing we Similarly, the those if in into that course, fuel look on the half the falls second if of fall comps periods. half, things the look you net the year. for three if FX, look minus benefit up you In programs at first the against have roughly XX. from the periods. we're In the we're base will at the plus two in in And the you second prior productivity that you first of of then, the XX% half. at to hurt going at discussed, against going half, at you the roughly comes inflation X%

factor as well. big that's obviously, a So

quarter. We of that. destocking be the through we're are regard to seasonality, at target just about to of the think been of most first good and business talked in From the relates shift the second kind point, half out where But dollarized a weeks from about as we has now. We think comes little coverage half historically than their value standpoint, we we a that bit in it QX talked back-to-school more normal QX. we might large pretty our that see that think at larger second trade customers there the

inventory and charges that And actually couple E&O work that as additional guess, our on of then cost levels, offer QX, down pennies some we have in did finally, a I'd we us I the quarter.

and we drive Chris second half thoughts pricing first margin, splits So as operating on the underlying think pieces really know half, the at as piece, if the I to wanted gross on add And well few a you appropriate. that look they're margin on... reasonable

Yeah.

last we actually effort did count that the came a we a were was to started of year, SKU the came the U.S. XXXX in, SKUs pricing impact we we we've been we from piece, challenged and business priced initiated and And at that reduction SKU count XX,XXX look that structurally hadn't the and when initiated that to the able level U.S. this work, XXX the inflation. things end of there in was of what because was that when inflation for the On business. in at one in the had Mark reduce out company's of SKU at work profitability fully where we number XXXX

announced And mentioned. of it's -- we've quarter, And the the are the will XX% SKUs. largely that low-double appropriate digit be will it's on so It these digit on for Mark between third our we haven't we inflation are effective it's -- range a in we the in think and we of priced effective U.S. where about because in taking be third percentages. warranted announcing pricing And high-single U.S. pricing, we're going be as to and -- fully business, sort it's quarter.

profitability mention it helping simplification for ago, of I'll also if to because we look that is us us SKUs three impossible the example of this had virtually do a been that SKU number the by have. because tried of at good to would years have we it

us level now much a to at visibility better that’s getting We’re this. much go granular allowing after more

for warranted. it’s the We of to business. think the long-term the thing think right do So health that we it’s

Of course, monitor the trends to carefully. going we’re

assumed regard gets our to that back in volume the line the with that top not market the largely pricing pricing We’ve and speaking, adds loss. we to the response, with into the assumed offset As pricing half. consumer the in put is the have broadly guidance,

driving is this of structural so it than short-term about economics business top this improving more the line growth. is about And

Thanks a Chris. Thank lot you.

Thank you.

Teixeira your comment from or Teixeira, comes question open. from is next the line line Andrea Your of Ms. JPMorgan.

on I'm it are your normalized much what comment division normalized [indiscernible], that assuming, I Mark, if seems well season. Outdoor can thinking higher-margin mentioned does you that -- said, hearing Thank that With of moved, in of on peak I both what Can levels. the you -- for back-to-school? shipments as But you're mentioned the as going those you mean retailers. you timing embedded said And last Chris, and obviously, because same it you the guide guess as like businesses. margin? on to well Writing you terms you you the year. in just are two comment And the think with gross as I'm morning. very good inventory seeing the

you your lap substantial And you the buy the then case the than of ago. decline terms I that a of directly, the more but that is embedded in a about this months -- gain in think resin eventually year we (ph) resin will from in case, in don't of benefit as as couple you get understand of what's resin. the

that to you. benefit, changed and embedded better anything since So you're last? I to the has And your the in guide? was got worse if see Thank you if wondering starting that's

good. right. get to Andrea, and Very Mark questions resin Thanks, All and the the question. give -- let try unit hit then maybe I'll business

effectively business On and was the quarter, flat first a from core Writing feel Writing back-to-school, sales the we good in very standpoint.

versus up because So we're until market that because despite being built we QX, Writing important most our period being meaningfully period that that's QX profitable in and means not share in today. company down And XXXX the is Writing flat during from XX% the XXXX Writing business was have base down.

in back-to-school, head the just sell-in we're As we period. into

really a from we I As planning September perspective, But until of normal will pretty on for are retailers read the sell-in year. a back-to-school get don't the say back-to-school of a you period. know, August, July, kind consumption

last people back-to-school I consistent year's back-to-school. think to in relatively general, with expecting are be

of a plan very have year, we of subsegments if period the about recall and into our heading feel some from had business. do This good not are because and challenge back-to-school we supply We we that supply year, available recovered. standpoint a little challenge, last on you our fully bit

vast have orders, positioning marketplace leading the already very retailers. in also with the the majority seasonal visibility about good in-store We display back-to-school our feel the and of we to

into And we head season. as optimistic are so we the

did Final thing that chain we're as in this I'll is rapidly, say and has past. because inventory that for on seeing a back not our are the to in school early true the business seasonal businesses improved of seasonal the as they now ordering retailers so supply lot is

for if the February, April inventory last year, season. So to March, for try inventory wanted secure example, to back-to-school retailers in

This in it the early. say, want it don't retailers we year, no, we're season need we seeing that later because

May, back-to-school and in July. more to we in that's June, much go the so expect back occur shipments normalized of why shipments prepared to to mentioned the we the remarks, levels of And

that's back-to-school categories. on so the it's other business, seasonal And true the on also true

little margin not Outdoor slow On gross different margin a And category to company. The bit off Rec the start. of Outdoor higher of a & & lower & it’s situation. very is Outdoor the the gross is is a one got company Rec, & Rec Rec of parts on average. Outdoor that than

the down quarter, of core Outdoor from the average below mentioned was Rec questions, a the I think growth the one down significantly high of As I the in previous XXs first & so company in standpoint sales XX%. in

also that came the season typically of that only slow the the to largely declare period, we regard a start anything a & May The Outdoor very what And below too base And of was were business kind or sort of in line. top to due in comping with the is but season. because through season. that below the due gets the It's really weather. big high to expecting to to QX season slightly is Rec on early July for really going

And too wind slow don't the so shipments you because of will the is in fast. to hold inventory quite hey, the so we how the saying, we're because what season as up can early retailers declare But seeing need overall weather, far up.

quarter digit the what a be to high-single resin versus since think for COGS remain expect and then We your we about been last low-single third on year, we digit to for 'XX expect resin, And us -- in it you for as ’XX. relates was ‘XX. so help to in question inflation it totality, has of

you. Super helpful. Thank

you. Thank

Bill Chappell Your of your comment from line Chappell, line next open. Mr. from question is Truist. or comes the

Hey. taking Good our Bill Lengel for Thank on is for you This Chappell. morning. Stephen question.

Good morning, Steve.

Hi. Good morning.

about do months? how it the of kind how fuel the you you On months Phoenix. side, of Can savings freight talk and and your next to unchanged, few if over for guidance this, course XX some I mentioned you evolving color left past some the assumptions the guys more you gross and missed understandably but of gave, from XX but sorry margin months kind thank see the of of those have changed kind over the

Yeah.

noticeable by couple a of seeing drop transportation a in cost. And are it's We things. driven really

of And parts. three so I'll parse sort it into

First to freight May levels. which contract years the now dropped back for freight dramatically inbound close ocean And before, levels, to we're retreat before. pre-pandemic to is I a -- from negotiations has seeing year X, for and is contract pre-pandemic go X were freight ocean think the container May noticeable we're upcoming this we've and and market back for to they as costs talked the year ocean close year seeing last concluded where the I've

that a positive. is So big

trucking what The down truckload as cost is And in of cost second this down there diesel market. down in seeing full are coming well truckload significantly is is is U.S. coming we're demand part coming U.S. fuel for as capacity as full the the costs

And so another stubbornly high. not which that's sort than on less sort we're -- the of Interestingly, freight, that truckload same remaining is of thing tailwind. seeing is

is driving the our Ovid impact down transportation costs that's third The implementation.

full are making of we're less good top full gone And we've It truckload less centers, shipments truckload. meaningful from shift seeing very but work to to big with truckload implemented truckload distribution driving so operationalize the move from for at opportunity and shipments. than us takes we our some a to that, into to as retailers Ovid progress mixed than

cost than for perspective, similar about half for amount full truckload truckload. versus the less And volume

we of from goes portion if XX% business full down for through by transportation the less truckload can that cost convert convert, business effort. the the truckload than So we to

And on of are where costs we sort broadly. so that's transportation

the impressed I few I've just when been mentioned offer at up one joining thoughts the And then to that of really productivity been Brands. it's me program. you want here additional Newell a fuel on because areas that's

back as example, projects. an million less at capital during those XXXX XXXX, little and look those XX% productivity CapEx we years. two than sold on two averagely our in $XXX you years, And we on a If spent of

If million, program, and you look capital our projects. is spent productivity roughly 'XX $XXX 'XX on XX% over of capital at was which

up. So has the fuel started to program ramp really

management through supply the the us bring this made center chain basically following opportunities those as huge automation XX% we seeing of move to Phoenix and You're of at the increased single XX success are part on sites. gives to node that across our Ovid of plants, that because point, the Project

XX% qualified. of XX% single XX% the the sourced We and have manage finished source, entire look network. So effectively $X at opportunity that dual that more now source, to And dual of right billion renewable up much is only you and an across right? is XX% sourced direct if single goods,

the forward, increasing fuel So just sit over see we opportunity productivity and going have today. we savings tremendous only we as here a time

much. very guys you Thank Awesome.

Thank you.

next Your Citi. Filippo open. is line of Falorni, question the Falorni from Mr. line from your comes

path that's high-teens? your to what also question. a on the longer take you they're has to in Just -- take on to us you just mid quick the prices follow-up term, to up? some sense additional then reactions first your And general, the the assuming are seen going have give So from operating price you pricing. up Have can competitors margin recovery or And prices you first, retail increases? to been partner your

lot progress doing a savings is benefits. front. environment of lot cost of external essentially on you're removing a those the the Clearly, But

get timing on because do those the Can delayed to to you line environment? there? the you. what your macro of path the Than So give Is is you us sense time think targets? some

Okay.

Let with me the pricing. start

We the today are pricing announcing just here just or as we announced -- we've just the sit U.S. in

in. business priced the competition is to pricing follow So we've place the on our is past, part put the of view as XX% about portfolio which where of in I effectively put give cost that the reaction. is today, it's seen the too the the several pricing fully we pricing largely for of generally is It in a we we're over years, inflation. early in retailer that U.S. And will that haven't pricing justified. that we're last full What on say putting we

we one. don't going do this Of to know course, what they're on

offer we because we've we up. that on not that standpoint believe largely XX% gotten environment macro we're seeing the reason meeting And as the because it's we've the wanted the us the U.S. that we we put great pricing are in has the consumer competition consumer historically has from think And pricing we the take focused a of inflation of pressure same that to encouraged value. been the caught not on given because overpricing are. sort already they're portfolio cost followed Frankly,

and it's have a so of this priced inflation portfolio fully haven't cases where where choice. really And XX% don't some structurally that the for business we challenged we is in we believe the

this. But relatively will We implementation pricing. when a work with the you We, accepting receptive think retailers I on story our as based been the cost of general situation. monitor have in to always, environment has retail

many over the from reports consumer other you've seen or company have the out past week come so. that As product of

to innovation attempting to longer-term which fuel initiative is this drive on the the up. of perspective margin think a operating why that us the that margin From going, opportunity margin, we is believe why got we've to the opportunity a Ovid And company. continue we're largely operating based, got to improve automation productivity we've got gross significant gross savings going, mix initiative and margin we've the accretive help we

productivity across to company. the continued the we've company overhead think simplify got on to also opportunity We drive

masked short a in of pretty term because but pressure, our the Mark in half of It is as the the significant guidance line back back implies through. somewhat top bounce the being went year,

helpful. you. Great. Very Thank

you. Thank

from open. the Raymond is from of your James. comes question next Ms. Tong, line Tong Your line Olivia

you. Thank Great.

a I follow-up wanted just First, on to pricing. ask

the talk in? or could happens you. then think comfortable I Thank you cost about, are versus SKU with value And then you we'll try that of see more don't mentioned any as to if hikes but categories wider price price have what to profitability? a I And you premium Any your How on about terms products? as are If follow-up. in you know you that SKU justified, others rebuild these more follow? gaps

Yeah.

in pricing. it's remarks, prepared as can't specifics the But mentioned get the we the the Mark So and focused into home in of segment. the largely commercial breadth given

where is And in haven't got majority for of that, we inflation. it challenge. of cases, fully because structural profitability we that priced some showed so And -- the this we've analysis

into but see I have would as have today go we where the pricing on. we the we'll has think a they other market, generally say the on lag is, seen followed and is I thing competitors pricing effect. priced we've gone followed, on What

we've by been so competitors. [indiscernible] And

the And some trying us and this take so short a go the to risk period at market term, we're out if at, share follows and future. in put increase price some in competition may

going going to Of course, we don't We're know do. they're to that. watch what

geared is part reason doesn't to have follow profitability we challenged, of it of us, like toward this feel loss, volume is the The products it. why if Even not if pricing but do much the because thing doesn't right all cost significant competition relatively even that this is a us pricing standpoint, that do will. really from structurally if are we you

along report do we So that's the why to we're right out as thing here. we'll and go convinced it's

as commodities is just But beginning we're you I second about is implications. one -- clean, I imagine expect flip, get rates know first that should if the quarter Thanks. rate a sort the half be only going business pretty compelling. in should the mean look half I look pricing fiscal of is growth Should in is base know to will seasonality we better, at and think would first -- similar base, half the run 'XX 'XX. fiscal growth exit into rate destocking the your my back-to-school 'XX? follow-up timing Great. but of And of place. the I

do, comment this don’t We time. to on it’s appropriate fiscal question. but us for the related we anything think appreciate ‘XX to We at

it. Thanks. Got

Thank you.

of from your open. Lieberman, Lieberman Lauren Our now Ms. line the is comes Barclays. from line final question

Thanks.

you're of of sort on much third not I revealed the but in pricing, the aren't and economics actually in increases thinking stronger really about things was know to other maybe structural about I own for that notion seeing the kind you're things be to if a kind spots explored this themselves structural at to was or business, the capacity by business. taking that across coming free And and my pipeline. where be just I there Thanks. of having an analysis the economics you've kind structural looking work up in dynamics the and of more get of that to basis. suggested how of But curious reinvesting you about quarter. on interesting. kind gaps So of across words, there's that play question that maybe of innovation SKU bunch price a a touched times pricing that helped for But to use your that are it found SKU-by-SKU straight more SKU

Lauren. Yeah,

company the from excitement a capability because this been we've been as have stronger that things the same simplifying and your work in much is we've question to reduction to metrics. one what of And analytical has building I think business the dissect coupled that We a is years been the complexity this few opportunity, to have the many wouldn't on is able revealed ago. really which capability, that with sort of do different

think the that required refresh, take to in to the refresh going is a on we're of deep to a the the this we're how to choices We're analytics I for up the we fresh all using are capabilities remarks answer choices and To this versus well, I the And question look my also part prepared stack going of where company. that win at the of, strategy. how industry are win and that competition. the through different to of corporate mentioned other play relatively there that is of opportunities? be And in yes. going things one as

culture, talent to And enable standpoint a the to do then execution what sort strategy. that we from of need of

I very we're variety yet, in few why how And do business is work. much that it different today. a excited think breaks at vectors. which of through here not on based position But I across really more we're that be think a sharing we're share out pretty the whole not We're So it's next the that of in sort about it to look detailed to going analytic months.

in at thing other SKUs add work. almost of this is X,XXX the I'd only The U.S. part we look as

mean P&Ls. tremendous us cost and really We X-wall are the America up, We've capabilities the with I replicating for been that building out are think We've going to for ramping it's analyses. future. plant provide doing we been customer P&Ls, same opportunities analysis brand analytical in Latin EMEA.

Okay. place Great. It's a good you. end think. the Thank to call, I

everybody Thank for it Yes, forward you. look and is. we to Yes. you soon. talking joining, to again Thanks,

A for Thank be today's replay of call. concludes ir.newellbrands.com. available at the will gentlemen, and this your company's on Ladies conference today you today's participation. later call website

day. now great may Have You disconnect. a