Newell Brands (NWL) 27 Oct 232023 Q3 Earnings call transcript

Good morning, and welcome to Newell Brands' Third Quarter 2023 Earnings Conference Call. [Operator Instructions] Today's conference call 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, Vice President of Investor Relations. Ms. begin. may you Tsinis,

morning, to Good Quarter Brands' Earnings Call. everyone. you. Newell Welcome Third Thank

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

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

disappointed the major third as actioning the progress had sales and corporate the core year new call. quarter. were declined the same as priorities established mixed the we integrated welcome of time, in during Sofya. to X you, against our start quarter. X.X% We deploying we and everyone, the significant well strategy. Thank At We the delivering at made quarter morning, results Good third

we in laid start turn, X starting the out year. take with priorities the of the these Let each me at

$X.X we far last inventory excellent largely cash our full to operating for than confidence due has billion versus results flow thus improved more stronger-than-anticipated cash year. on us on given year-to-date, First, raise year to performance progress delivered outlook on the reduction. The flow, which significant

during gross inflection year-over-year, force. driving basis program with margin Second, quarter, the third expanding as along the XXX an fuel pricing point, reached the serving points with productivity

We in XXXX continue with gross productivity to fourth the expect savings continuing improvement margin quarter. year-over-year record into

to the with One completed Third, Project markets moving Newell changes all we've design Phoenix the organization approach.

$XXX savings million and and to organization year simplification year We XX,XXX are and this count on the pace at pretax $XXX basis. Fourth, of $XXX are million SKU XXXX. an to XXX,XXX end realize year with annualized on across the $XXX of from million are reduction with over track and we to million moving work less track last down SKUs, the about at end XX,XXX than the to on

We selected to pay way segments, creating the already Finally, customers most possible manufacturing Newell centralized been previously products goods, One discretionary background savings. The difficult on organized place One challenging persistent million in the not during would quarter inventory and was weigh soft to post tight how third macroeconomic taken annualized now bankruptcy have and category that estimate with amidst unfavorable scale XX% leveraging to top from normalization inventory geographies are as of about by well retailer was sales dividends. driven we force to the & necessary impact declines rightsize the but under retailers during Beyond. decline about inflation approach quarter, as cost actions and a is trends with example and the X The labor the expected actions. of the are the and yield is across reflecting line due which everyday fully Bath chain Those the by a the management on starting supply for to operating continued top COVID, actions our Newell's model $XX sites. third new approach and of manufacturing X Newell in across durable category concrete a Newell and Bed demand

since and corporate, were there emphasis economics all the approach back or several business consumer-facing capabilities result our our in structural brands July much on honest and appointment placed improving our over where strengthened robust we set sales building focuses brutally our years. we while At top we a investment company's situations distorting was were foundation developing functional capabilities traces our direct address X the why top unit, However, ahead. guide and of capability May, front-end gaps meaningful pricing past to in assessment that my portion untenable. That new informed fully of the have proactively so which built consumer-facing XX to in to is of markets compression strategy XX in organizational brand-specific on have of the was on to core, strategies, operational actions by our took years the a its the our

several deployment our decisive the ways. to new of we've in strategy the to life new Following taken strategy actions June, bring in

This on process put innovations do, center bigger margin ensure the creating review insight to around propositions consumer the and driving reinvented innovation to innovation to that gross XX and faster. Consistent with being swift we the taking consumer-driven biannual market comprehensive process of a identify longer-lasting relative been are smaller action as and consumer our of everything brands. on this overhauled with are function Newell's we system are choiceful top focus we've to noncore designed fewer, execution, into consumer-relevant understanding in we established part accretive brands strong new launch to strategy process. the has First, the of exit into at a and tiered get product insights

focused tighter, moving start brand at portfolio at this a comprised to are of expect brands year. finish the master more XX with We of the pace about versus XX and year

dramatically close Newell's of and Second, and brand standards KPI-driven and communication brand into the forward. exceptional capability, to set managers strive place, building over build half months improve management going to brand managers clear for to expectations put as we past we in all performance several a foundational brand brand which replaced

changes our ability we unlock to process recently and drive implemented of addition, accountability brands. intent purchase to across drive top In structure decision-making, and important quicker our stronger organizations the our and marketing improve XX digital to

brands have the selling bulk to team Third, incremental tasked of with will our Newell's continue development, resources accounts, our sales they business and distribution leading existing distribution with on opportunities members identify and of their will while and focus scale key Newell's where pursue customers. of maintain new new leading to within portfolio partnerships extensive strengthening leverage been increasing

of countries of in X across new, set geographies. interactions, America. Based part Newell's of bring XX strong visited and brand strategies, those key play cascade of wear have along Newell's top corporate Newell's to properly roles how talent XX decided segment in win I team to and Europe businesses leadership to on have North we choices, the to to with across several now the America, and crucial members Finally, and top integrated Latin and fill function new

new of for leaders the as recently home France. well and fragrance businesses Europe For example, hired we heads and as kitchen new

the call interest. an since area over I'd turning back-to-school that's season Mark, of provide perspective like Before the on to always little to a

Against EXPO for we the industry, already growth that their from modestly, aggregate, not excited focused backdrop, predictions driving back-to-school play stronger private across important label put season, prescription leading the incorporating behind Newell retailers back-to-school competes several our plans categories this the with gaining on the in leading why learnings in brands year's grew where share which this from brands That the the our widely market and for down most retailers. brands While are to a versus success. such which varied market Sharpie can with a next long-term share, offerings. performance major were we That's said, of declined season as into leading that market of support category see. is in role those is

case front-end share, parts why This make major that's of not the there the strategy. to While we where needed are a Newell's in pivot highlights portfolio company's gaining broadly. are we

Deutsche did X performance quarters. the be June target are our line to of performance, X we expected current in top While that low to at our evergreen we our we dissatisfied next sales below with conference Bank the single say for digits

those we Beyond on as the up, flow very returning progress of capabilities and XXXX ramp company to that new priorities call, is in for were top reiterated June made that bulk cash our growth. Back gross also committed both the good fully margin, of and our being improving our strengthening earnings and we last fronts. to line and during financial top remain

year, will the the us, why XX are strategy are growing our exceed shape. starting certainly sequentially margin free of the productivity evergreen we business more number market next year much top continue and gross that And as while confident measured will of share. do expansion by brands there to cash to work to of target ahead about XX%. this flow take That's is So improve

company's new to required and scale strengthen improve implementing power have One cultural front-end operational the significantly performance, harnessing As we changes organizational, strategy the operationalize and the capabilities and execute financial we to been of our on our consumer-facing while Newell. laser-focused

employees to over purpose and dedication the straight time hard remain commitment for I'll will be and over our hand confident will Newell's consumers perseverance our for amidst will would line, Mark. significant and everyday significant lighting call their like moments. changes financial a we of thank our path leaders and improve forward unwavering delighting to not to be created performance stakeholders. I for the While value work, up their organization by now

Chris. everyone. morning, Thanks, Good

sales with same declined and last macroeconomic the year. both we've X% approximately headwinds to been third the largely net quarter wrestling Third sales of due since quarter core

in QX last contribution normalized However, margin basis improving in third contracted XXX a make Project charges. XXX our than A $XX the the driven normalized more home offset note, Newell's significant by the space, margin positive normalized to significant quarter, fuel million pricing absorption. Despite from basis last actions economics and improving to to savings progress continue points savings of in commercial to during by XX% primarily excellent amounted year and from from quarter sequentially incentive operating points the business, productivity roughly as work XX.X%. across business cost XXX was year of headwinds compensation versus meaningful the which with of contraction Phoenix, XXX and higher inflation fixed we basis team X.X%. productivity operating as Most on point U.S. the structural points taken basis well and strong margin versus gross more the

lower was may last during difficult. very comparisons incentive period QX you current compensation As revised making recall, sharply year,

because rates net quarter, in third $XX quarter, was down $XXX million third $XX the upside over, per million, and normalized in normalized interest benefit elements and of solely increased originally in $XX was million down at higher previously discrete which to brought net provided. nearly During share debt to year-over-year per $XXX fourth a significant expense quarter benefit drove combination in a year relative nearly last year-to-date. yielding went due expected interest to captured with million earnings The normalized outlook versus $X.XX tax $X.XX to the diluted just tax the the we share the earnings other in $X.XX million

X the flow. million through progress versus represents same a teams operating period million remarkable This of sourcing last a which Turning extended Chris cash flow allowed through production XXXX, months $XXX $XXX for to use management quarter. Strong I cash during improvement the to on and increased first year-to-date third cash flow to want operating inventory generate considerable of us that the cash positive planning, and $X.X of Newell's year. achievement is billion, delivering. than Therefore, more thank operating

end before the third company's As anticipated, the and at at of ending quarter X.Xx. X.Xx at leverage sequentially improving peaked the QX

debt leverage flow improvement investment-grade X.Xx. projections down and leverage expect ratio Longer additional status We are in about and the remain to to QX. our cash committed target of ratio exceeding paying in term, a achieving we continue and

billion the in lesser to represents the and management, forecasted economics extent, XX% the fourth increase the year, to than be be relative from the we've a due core remainder of by is all both among the in the over the last last Phoenix to normalized in data year. expected demonstrably a due year $X.XX in to the out versus retail terms, margin to lower sales down but and dollar have should sales to sales structural quarter. last SG&A expense net interventions we've for control, year. and driven quarter Project of percentage we last Net XX% XXX invested is $X.XX of which Looking assumed discretionary the growth as to Gross is X.X% others. Putting billion versus margin made to of to to analytics operating range savings together, higher expected sales expected and of are to following the business. this of and, improve be SG&A year much targeted in, fourth as spend range customer consumer execution, improvement quarter point basis to a revenue fourth understanding, to X.X%, XXX capabilities decline

As company's the range versus grow midpoint is operating turning such, forecasted last mark of important year. expected point is to the QX the profit, at an nearly which to in XX%

the in tax of we in expense Finally, the the rate and high to forecast fourth quarter, $X.XX for earnings year-over-year, higher $X.XX. be share a teens normalized interest range per to

to pleased for our flow now Project to productivity generate on on north which, of based expect with to up outlook about benefit we we our cash the year. At XXX%. priority, midpoint We $XXX so driven earnings the year-over-year to million sales start decline operating year-to-date line a line tax margin said sizable operating normalized $X.XX in Normalized negative reflect $X.XX is largely share diluted XX%. net be in be earlier. expense significantly third the was in the by discussed as to cash $XXX the as our top for of quarter. billion, with forecasted per of the #X tax to billion inclusive of estimates of to Interest X% to per track we're is realized and than in our year, full the strong cash flow related Normalized $X.XX last the the that reflecting Phoenix, more have expectations benefit expect we million capability of earnings $X.XX indicated, forecasted can was now sales year, range the of cash payments this of range. At a are $X.X cash raise to operating cash the confidently year, Chris generation million to flow we performance, year versus top even teens, $XXX expected flow million, as is investments by been improved billion savings well X.X% expected of core $XXX million For to $XXX flow-through that be $XX share pretax tempered. free very outlook, million and

conceptual might With stages, very the that caveat helpful planning year's to process still is some next in its early we high-level be thought provide thoughts. it

So with meaningful in basis. sequential top the is improvement line run rate a that on understanding, expected

spot core and Bank to expected being macroeconomic rebuilt. Please based to with target at growth is over preliminary additional the stated on sales still Deutsche capabilities XX of by exits XXXX still the to comments Currency to persist core we provided current challenges X months. with planned growth be net sales sales June, brand evergreen by this down low is are an XX lower commentary next in that are rates front-end conference where X collectively However, points. below the be in expected sales as consistent single-digit note combination

be significant to invest evergreen improvement which Importantly, at of slightly we strong basis point represent we this continue higher Interest fueled earnings pricing savings, rate about planning in for a should behind would target product we tax benefits, ahead front-end per of effective gross year-over-year better the are expect to expense point, charges and to headwind less capabilities. normalized as a margin productivity share. and operating obsolete should XXXX, XX%, year, mix, expand allow next by XX excess which carryover and margin even

key once But for planning more we're context major call. remain process. provide today's closing, we'll say in our it meantime, cash, in area the along further X suffice cash for from there us. In will to As a focus takeaways are

which pivot will strategies, First, assessment. front-end play were our the all in the very time, our in we brand to have, integrated of to choices clear are making of pursue. long functional capabilities time now by consumer-facing business comprehensive capability progress corporate, deployment the We and for and successfully that on where major a first unit, informed win us company-wide a allow how to strong heavily of new set

Second, key pressures for were the margin greater priorities, delivering Newell previously than and though XXXX flow is against X are cash that gross financial even macro-driven established anticipated.

doubled QX year-to-date. more improved Specifically, the business on of margin control, are operating flow we've and And cash with as underlying structural has economics gross expanding additional and improvement expected that the year. both being than within during are $X.X sequentially strengthened with billion margin actions gross down year-over-year, next our

undeterred environment win please macroeconomic Operator, monetize and by required categories. deliberate we call open with and full in portfolio remains front-end Newell's the with the unlock leveraging questions. are if while could consistently brands the are to scale potential to the consumers of forward for creating our challenging, of capabilities the and and speed building So and you moving leading customers product

Wells from Chris [Operator Instructions] Fargo Securities. comes question the line of Carey first with Our

now? right decisions making of earnings, to to we're balance favor that the due statement, just question the now, So high that the Can expect the much you evolution income as the I just X right? So opposed the business? about to in between organization the the performance to of sheet want the certain macro as flow a flow free and I of maybe would bit just is And guess a headwinds focus much things. underlying manage cash focus you again and very then to the turn and how right those talk competitive level. maybe right back the statement, priorities think talk other on is in of that of seeing given more tension and these dynamics can delivering you sheet I over perhaps balance income ease, time, is cash kind now how the sort

Yes, thanks for question. the

So the improvement year, structural we And and of remarks, commentary try try at bit as this we've a a that. that. to prioritize and right, to let me we gross business. little beginning economic improvement the on in margin choices to you're of prepared drive provide series the did, cash And in flow said made of

the inventory massive last year. cash think, is be versus is down, year, billion which this I improvement, the operating driving last our same versus to flow year-to-date $XXX $X.X around seen a which million You've year is better time

business basis we turned You've also in that a gross to and more of that this points, the than XXX up expect versus margin margin seen QX quarter we've improvement gross now to driving year be ago. even

it And some those accepted was choices the we've and like effectively X in distribution increases, on, price market businesses. where we seen from. away of businesses, those profitability are those price things July that businesses consumers the some the commented retailers what as walked of margin put we we've is that cases, price business unattractive those Mark some priced have we've structurally X increase accepted in but cases, increases improved. those have lost structural In on And

believe company brand on to which more focused growth that capability than building, I broadly back improvement mentioned think that we the same so that our actions improving the around we doing deployed are we've the the portfolio brands, consumer XX today. top time, consistent is strategy share long-term very the we we with where are understanding, of XX the market countries. what And At quality top can we're focused get innovation on

environment and brands set are we aspire market market Sharpie number brands, enough like and and when the a do growing are we're with growing that are about the really structurally Crock-Pot that of in going to that's turns, across and today attractive we're leading how thinking macro with broad And EXPO not position Rubbermaid our but on share brands, and we market the business. a forward. share We trajectory of -- share more so brands our positioned that and Ball, growing a a leading

follow-up. quick X And

to you function remain smaller, think the you for how sales, XX need to performance XX versus in create for you a as do a cleaner, think market Just term? the longer organization of months, core growth, of pressure, dynamic example, share under over that much more maybe would about things that to foundation of next is category profitable the that this

Yes.

of But these and contraction majority, as from this sales front-end quarter, was we core to the decline about want some actions. related retailer by where inventory having market them in capabilities there's away XX% think I prepared I really and challenged the remarks, us structurally XX% businesses. of that's walking the mentioned driven not the

improve is think from category a macro and we dynamic, that that is strategy I on standpoint, us over to I take underlying rather consumer to you're the durable going to consumer to driving and categories than growth predict, to go an pressure discretionary that's is the growth to to for capability shape. that as the that We positive inventory point, at dynamics headwind spending bucket as that's forward, turn category dramatically And behind going a repeatedly. the food, example. see hard prioritize believe are as essentials, said believe months. The end. retailer away we do dynamic XX% harder The starts some coming largely the into investment from -- think But next predict. and causing a are XX XX consumers to destocking that of this we've

line Andrea of next our the from question with JPMorgan. Teixeira comes And

to to wanted point this back I share. go So about growing

or are the on you from sales from you saw that grow of having you I though distribution are in You profitable. XX% flow mentioned been the about have choiceful been a make not, of there acquisition. to I over and if what enough the can just cash that you've the what through or category, But sell capabilities for years perhaps to more, But decline have you businesses? honesty. core decisions rationalization make they mentioned of other in should not perhaps things wondering I so which declining even I understand cannot. And these be businesses, that share they know can keep not may appreciate lot you since could not it think, made but some of having sense what it's a choiceful some the of sell Jarden

along divestitures wanted and therefore, there it's number you, more it's one, I some this is believe not space are? some go just you these of out back that very getting from been So Because for a full you you categories all or of I be process these to it's see you understood in if like far -- reduction of the or how and doing to SKUs. And business, in massive reducing this going can -- you've along like SKUs.

So I was wondering why improve profitability? continue to it's taking so long. like Or is in that have you order something do that you to realized to

Yes.

So let try me some to perspective. provide

announced we are when consumer across world. products retail XX portfolio in same The the understanding, strategy point based innovation, the we we were largely channels selling branded that XX had in that same -- they're through are sold XX distributed time, had So set the applies to June, we across largely of within the company. And brands they the were fit company's at selling that all the brands brand that on because building, the capability of brands. we

been also together are distribution made best years supply feel the brands. get system, into over last that of on office so things those scale And on to owner now back the where to leveraged. X get the cetera, have important and IT with to we've cases, et Ovid we program, chain we we so X believe, in is network the most completed We've that a things the be got the progress divestitures that from can X portfolio there and that like fits

tax value the we drive right would break also said, right we and date, is have opportunity believe big portfolio the get value to said impact look portfolio So the unlocked? being think don't seen be brands we dissynergies any because there's we to from answer. continue the is clearly XX is thing a a to we divestiture. That to there up overwhelm we the not But and value at, the major would and very that that

of as because profit top part XX% company. of the XX brands we're so going represent the to said we the and prioritize the sales they And of strategy,

mentioned moving And the this are since announced by to we XX We from remarks, strategy of XX pace down end brands in that I prepared June. in at down expect we my be year. to as

So the the to and we'll that's meaningful of reduction already portfolio, over number of a number in reduce the think time. brands we in continue brands

in have to less As we're into we shelf we we number portfolio, brands how on reducing shelf on what is brands space doing are space these that smaller, converting consumer-relevant largely the the bigger, more look of it a across brands. an of bit want to basis, But do our shelving their annual profitable, to and more on consumer-relevant time typically create because shelving. reset don't we little holes retailers that takes we're

more And so of these we've a portfolio this exiting plan focused worked up a we the streamlined time from XX. shelf over migrate be space into that will to on sort brands small top

And our next question comes Securities. from the line of Truist Bill Chappell with

at high-level time business the when new now, macro doesn't like there. you are But forecast things third a it, of in kind morning. be, change the categories to is of is so outlook recovery is I environment can conversation of in number Project X/X trying of understand and ship other think, lowering volatile. And know to new X your the normal. that now when of so with this I anyone to of line top in seem I on that, of the this it in many And keeping play to cut I Ovid, Project projects or with a This SKU kind there talked couple of and kind kind rightsize I the when about the seems as kind kind to -- of things you really replacing, brand Just the by it year past XX, of midyear. kind your how the of the mean, months, doing post-pandemic brands reduction, say the managers forecastable try merits right guess,

things you you're had it's until isn't kind X -- Or sit? of be a moment? rip much just that changes type great So going you -- how worry and do these doing of to or forecastability that on that Band-Aid could all maybe the to we happening, you something with see do just this kind touch for I'm months is too that

Yes, talk It's we inside the it's lot about a one the and Board team with management good question. with a that company. the

to If guided expected. in the it's right forecast of you weaker we the strategy to so were of midpoint X we was QX, to minus have macro entirely the really with what that the improve some that irrespective recognize negative market trying and now. That actions think macro And as that of macro because doesn't take capability versus done fully that share this us X-point the leading market and market when the those market that with that sales growth we we ability environment. is right that basis which be given advantage We're that slow consumer believe as now. possible range will happens difficult dynamic, portfolio will to in to and at and are X% to drive it we sure being not that to planning market miss ranges macro came eventually on need we to of to the is look points off point, brands a be need down now growth, the than happen at X%, put at environment. But in challenging to driven down need drive outcomes, and of the a we said, environment assessment of cause X% we work will a forecast. that that I we by better we the business the but improvement had to that growth gets to actual, that it core a very environment from the capability the we want grow run environment capabilities on because positioned place, make we've turn of point in believe, your these offtake And scenario wider consistently

to way got change like keep you're It's at that and initiatives all process. kind the continuing stuff in pushing look forward or I for ways -- when announced Got the I'm we been the I reorg. business. It's, listening with it. new to our is, original that, Is they've and of the not just mean, you it mean, new look to to initiatives

exactly That's right.

no which drive we're driving -- assessment, that there's strategy, initiatives try in many them are now been improvement. from the well led the to in the the And capability to strategy the capability So there's of to comprehensive change that was underway. or

of as adding June actually new review. we're things have the the completed, in we it's plan put them that but Some the not on We're driving strategy already been list. part place to not that of all,

follow-up. Got it. X And then just

a category the low I mid-single-digit pandemic. you. back-to-school mean, On prior into had at was going changed Writing to many what for that have the with everything that the least years growth and instruments, and pandemic Obviously,

long-term more category? environment, mid-single-digit it more or this a to and to a not is back is Or growth normalized getting mature it we're used now As mid-single-digit maybe as to low growth be? opportunistic it's as

last last XX digits years, Yes. XX COVID the on category We've years, out kind single you been of growth over over Writing low over global the sort if last growing -- been the at that's basis. that, blip, years. a a normalize it's the And at looked category of X the over

growing that, So it's a be. think we place it don't I the category. right to think mid-single-digit that's for

low growing basis a forward. view a it's think of likely think I we category. is that's what our And single-digit going normalized on

Peter UBS. the And our Grom with next line question of comes from

we'll way on because kind of margin of appreciate February. frame But expect commentary So and I'm 'XX to in you're expecting that just of all get the kind is there should guidance the concrete I degree we more any expansion to the in more Just subdued less tax rate, interest, because robust, would if that pretty which continue? substantial imply bit higher given line a step than substantial XQ it exit top that? the be a it's EPS. is Should rate, down sure commentary, pretty

thinking So helpful I'm to we just not trying or should to would it down anything directionally guidance be how to it. try but about understand pin just be

Yes.

nearly current quarter do large part QX right? to QX few the it's me year to and and what very savings you're that's gross in sequentially the into QX really our QX are to have economics we COGS. been I us QX, by almost about the from improved fact that of the quick fact time which X.X% expanded business. fuel driven calling business going to that a to the QX, progression. running from Phoenix launchpad and we're restructure the here. getting margin thoughts will that of year a we traces We into the to in some after put on offer years. on year, to this seen structural coincidence. not Let since can of even that's the margin 'XX, decisions We're a mean, seeing And order we've it margin is normally think this reinforce continued by of a happening gross Xx in excited as gross of relates for and It productivity notable the said we've we've that the and good that what's progression in following year. It's the And second margin gross at that Project the most this improve front, first back commentary maybe I

importantly, operating expand right up, to provided supply a procurement, additional and XXX quarter we're So as and normalized direction. a expected seeing. that's allowing the lending I margin of as the if strong call force the to in that's itself to we move us I the in gross fourth is what's points. for based be chain really margin mean, more opportunities is that on said, is commentary basis to the is kind progression that all huge to XXX That unified

to it's I contraction by principally, that but it's market at line difficult know when see trade top and driven underneath most surface So destocking you're all compression certainly looking there. the the

of we year that will on most have making. any above targets that look per time. gross that at provided haven't evergreen certainly for and or We at will margin But growing be next if be by won't we're next this progress margin that we specifics at margin our driven points continued we of and year, year, said we basis gross XX op

how on it. Got maybe big category which really category into later called in were That's really the several trends kind weaker And driver XQ. up helpful. we through the that and October? the it And get been progressed here quarter? August performance, as color obviously out of then have give as Can just has further us of a times Did just you into slowed on following worse some September?

Yes.

September versus I expected. than sales We think in as our weakest I the mentioned the higher before, contraction which that was points miss really did in of the see -- quarter about what our weakest market QX X of we the guidance quarter. third came rate, was that the month core driver

quarter. of And so in the running we of guidance did for is back that got our of line with October, accelerate obviously, view much part of we've trend contraction the see in part first market very terms the And into some and fourth the the quarter.

on quarter bit the a sort the inner that's of play. So

Yes, be it if as I because by our down could, obviously Chris think saw in indicated, we might I helpful sales core QX, X%.

decompose on to might And quarter, For call try today. we're think it think I will down effectively sales and of the core between the instructive we that somewhere kind XX%. fourth be our saying everybody be that here and XX% for that

just towards market and digits, X% single let's that X% the to that QX fourth that, we X of analytics, as that. expect that QX, that somewhere if point. destocking, indicated, incurred, And only the in printed digits well. that's to roughly was the for you high down call tail We you'll certain analytics. things be Chris that we're minus data the indicated, enhanced to of of on as quarter. Chris as X QX pricing QX. that is part down mid-single release. The think think So it carry That obviously share will are do and do on that Based our QX, somewhere contract. X%. continue over the then to somewhere X% between there Trade minus in we true in to we loss argument, We that action math will And QX take will see a X% different in [indiscernible] both to think we in actually was element both on let's be the and sake did end our call capabilities more is, think in getting of our we third This quarter we

looked You'll actually that X,XXX recall able SKUs and literally being at structural pricing those actions. make of to economics the discrete we

we to will a up away, again, this indifferent that. very might pricing economically chain lose that be and falls then and targeted we were away as but they it make and be think or because economics they were business result So some X. the But in distribution very, places, the will QX, were the a in point right we're if so differential. poor needed of that actions where structural taken supply falls is the the the And

sure we're quarter we're today promotions because properly calls tough to less 'XX. doing the question have that make The now in provided playing other was making is the we it a to to, fourth going is for where and Chris what really earlier is into discount piece set gets deep we asked think points we X that the have back about to launchpad that an answer

a fourth of didn't where, we quarter historically had frankly, the promotions money. we've make so lot And in any

that doing capability on we're made what decisions there, get our the is untenable we walking grow from work And ourselves past to were structurally we're the done. that's these way so good away can on footing. based And from back being in out

our next with Brian And of line Canaccord Genuity. from question comes the McNamara

get Congrats in at A on and the top if Newell we often again. improvement flow. strong we'll really cash line asked is when question see growth

will that mentioned down next year. be You've sales again

what XXXX? targets that should give evergreen in So investors reach you'll confidence those guess I

Yes.

well. And we be -- we would the we And we for very I that that growth. laid this multiyear get to core expected often was evergreen it's think the that below when ourselves a because we company strategy, I as target clear we question, core next strategy. X investment out the the think I were ask that be think one on that to sustainable to capability of back the required the sales that quarters was to on said growth X sales going

made we I making progress I much strategy. over months capability actions taken. the last the and very contraction very We those is on the are retail into strategy, the weigh. since at X piece we've But strong The that feel think to the that. point, believe that announced the going but X good the overwhelming about actions. months against the that of that with incredibly are we're inventory only progress market we've fast and some improvement We're track moment at is sort we

As hard it's to mentioned, I when that's going be. to predict

be down we're to remarks, prepared sequentially be think And on as we expect the be his we in next year. likely progress capability work we're we'll to to going on have year, green it point We that in we're this is we'll year, place. think than on be core bullish improve next said very to -- better year a improvements. the in in better think strategy, trend. the And much sales 'XX, think will we next from Mark about shoots making to the that As going we 'XX but help

or the as discontinued or partners, of lose them being any by then other? licensed shelf of And with largely being are it. secondly, year XX or you you'll Got reallocate end with the brands retail are those the your sold space

be this. probably home agreement called brand revenue XX% Italy material being might we say discontinued. would is some the Millefiori, are Italy it of million leverageable. are example handful is portfolio and brand brand won't ones are that worth a be the this doesn't to that and In alternatives answer go other In the in not at looking X add I that that They sales we're XX% X to There sale fragrance quarter. that It's think largely we licensing, we and are the And meaningful sell. An and $X to the brand. or don't which we brand really to cases, that to brands reached either sale close that through are it's that but them. is a those are that going a just are are as only more have a brands of discontinue X distributed there's where we we in to sell to that right a Yes. is expected all on because go and we've cases, we just have have actually we try there looking to country-specific brand, we sell.

with our question of comes line Tong James. next And Raymond from Olivia the

given just you focus if respect flow, commitment talk dividend the on obviously could First that your about what cash with to the at to implies question, levels. current

relates that ratio, about with I year think our XX% Look, and dividend. going feel said an made XX% somewhere good intervention along dividend We forward. we where that to We the we in to are. rightsize pretty to is it Yes. earlier this as strategy payout to to tackle we're going the that continue be to

to So we position. feel I good our debt. note cash really important mean, that paid about it's we a down of amount significant

down $XXX million million So year-over-year, debt far, year-to-date. is net $XXX

work good really that the feel we So we're doing. about

market you'll just I out to billion third out is that last to The year. we opportunity point in to that take our literally going other obviously go contraction would quarter with. of the and we at year, do year-end on this billion end we're And inventory as our of top down the have of and peaked $X.X to speak inventory the this recall $X by kind thing think of we're contending forward kind by projections, drawn of

kind to inventory, trade fixed production self-selecting of hold destocking market the set the going right So order the contraction back is the the quite next our that notable. for the forward absorption base cost from cash and really and having years to basically point release then and decision in clear

is and other we effects had because inventory that At that year, our costing. way. starts as over talked at it was inflation $XXX of we low now our much inventory way running quarters honestly effect. single this other digits, the million we've in here, going P&L just high inflation over incur carryover last year the stops do first, bleeding charges the to which about out being thing of actually bled third year, it of The inflation this we've kind in the it's the inflation this And quarter And reverses the been third value through of lot second year saw basically that's basically awful now end when suspended the that we incurred that prior an been the into year, digits, and we the single of balance. and of end haven't of

operation. we our up in we about the So front taking our future feel really for the been investments gross make really end to capability business we're really the the about to set then about driving decisions feel start of good cash position. the as good success and the difficult We we've position, excited margin

Got it. the obviously are continue. it sounds like is challenges expected And -- then 'XX to

thinking the some address. time you that around structural you of sales eventually, moving the about tough innovation talk briefly you to more on pieces, think of have environment about faster through back-to-school will lot take that of specifics moving walking about can and path. versus talked recovery businesses order can Can ones your the take the still that recovery more? You that plan. part you actions parts that focusing maybe and think maybe can sort improve interim just even the the to in combat As in innovation drive And the would recover about other a that categories and ability a the more ones other clearly within the imagine bit but will will become of different to that challenges some division, little

Yes.

think a started. from where try me standpoint company let you So I is which first,

in We've the change And top importantly, just it's also in remarks, measuring. measurement categories that look and management place we put and where CPG in companies were not shelf system we gains the tremendous our in our prepared many about, exist think but place not a are our significant is amount new distribution, to a before. We're at started a promotion, we market So we get share. market put multifunctional of brand are which XX capability incremental And going the our have which below talked putting we doing in selling after distribution believe market in our my to capability not teams we're a structure. consistently a drive innovation we now share putting a we capability did putting in our to against place We're can on the our in growth is manager other opportunities, selling, there which share we're which of brand process is finding place. but a selling we that amount And of of. brands, focused in merchandising that what many compete. front-end categories, the place

So to retail we think our opportunity to more we've got a big appropriately change the environment get brands distributed.

competitive of on about our communication, focused online brands of part opportunities that on our internally from talking the on I calling market. change starting on both against are for and the capability when are price. advantage. seeing superiority right benefit I'm representing execution, a not MPP/HPP new something end, talking but also of performance, And product retail feature is front a and the say and end the we're a And about on significant on standpoint. we're packaging And putting pricing really the the of I'm We offering, is to on we front set all improvement. is that brand that claims, across value for in-store and that with products value the measure pillars organization. It we're lot it all and good value, we're low things, focused on KPIs

if XX Some it's ready launch. the to them before funnel, take to put take innovation a it might it comes are to time and you going idea of because months in XX new out

with Some we're of faster. where brands and underspaced them go are faster, things can existing That like distribution, new distribution our opportunities products.

when said -- vectors highly this for were turnaround, the the X business on really say will And units why they come company multiyear question strategy the to all quarters take categories because so because we together. was thing is capability effectively those of that's to end. I is driving X other that independently. was each said it's operating operating X units But all going in that variable I'll all we those of your we we're June, business this previously effectively, on of across say a to front the the in and announced improvement it's on

strong units they have so the relatively massive work be some we are we already market the a there's opportunity Outdoor were XX% plus-up And way X starting are but superior from where capabilities like of where business the represent business & position that of Rec where of very get there's business. to which business, needed market example categories that that -- more the need capability And to in to example And growing we strong share Writing great products are be. be growth. that from on back most It's starting that value. There in. improvement. would where the profitable do an of We there have that improvement almost performing that front-end business we're would an in there's other and do back capability more business, to to we're getting our

of And Lieberman from our comes the next with Barclays. Lauren question line

interesting would covered maybe much it ask thought You've ground. just But to retailers. so dialogue I be with about

term also some the money-losing better mean, in trends I from of your from categories. in points eliminating does but promotions. these less bit But lose detract business and it's retailers some the long obviously, these a So X on of about that. health talked that you P&L, for for good fourth of quarter the retailer

I doing are And you're the for feel line guess you of category sort of term? they factoring their us conversation of year tell about off some progression, thoughts So ripping in about retailers, can growth? time near they with and planning the the next the how about Band-Aid what into how

customer, top-to-top Thanks, top we've with retailers little would done of Ovid past, today reason say in And we've is focus It shipments. ours, where bit better I customer. as We'd to was have would had of of picked simplification X our have of relationships it's XX chaotic, retailers number we ago. And would didn't that's may a with This continues our the and legal are talked but I entities, in X with with that a them. relationships U.S. little voice than our XX operate customers and I've bit done. example an vendor We that them orders. were weeds, meetings, ship LTL take And strong. as I we've XX that for I our force be. both Yes. any them different -- of numbers. work years very different was provide different We internationally. the would those been about we several to used the and XX if be them as the really significantly ship the implementation we meetings in the Lauren. describe And to retail And confusing, and that largest the it big case. to a could where

today, vendor XXs the our now you them look on full with If interface full where with probably we truckload X at shipments converted XX% truckload number. XX% We've legal was we from X shipments. to are what entity, in

to retail not supplier better the making choices to choices them. help a open largely, that for They But our bind. a they're So very make leave we they retail think -- this largest vacuum. right very these us have retail supportive we that the Newell, made. that make in We don't improve leaning trying are of that's dialogues the win-win the of we retailers way to with structural most are customers that. And and the to recognize and the and to customers do partnership our on When with them. in got and merchandise we've we're choices I we our in economics, don't so recognize a dramatically we in are surprise a supplier journey They us. We're them that we've to support to we're largest customers, these And improvement seen want win. general largest, them. of any in a the

question Filippo Falorni Citi. the of final with our line comes from And

question First side. inventory on the

that you're at next second driven standpoint. inventory any market mentioned like on share that's were into price justified, was pricing? what great. tail by reduction comment of your reductions. your in what I on I competitors can on from end risk If would of a both guys from the feel level case a gives the be categories to that, were consumption there You Is the continue guess worst case, the confidence to a you you be pricing not extent question but year? actions to soft? a performance And further then know you following that the

Yes.

with the start me Let inventory.

coverage times that QX do down. have is of we So how things implemented we at weeks to even shifted cover last And last shorter, of are market retailers. measure as in their we year, market, more. are come as accelerate And directly also data actually, the of hand. of much back our one delivery weeks much of on the U.S. we their allowed of much we've them reduce weeks the has of when our the we've top cover seen year saw get now inventory retailers from they in weeks -- And cover Ovid which the

to but answer of allow not months. that because allow And our the of believe retailers maintain what be seen weeks is continues inventory the go weeks if risk going your To cover, weeks taking near be we the reduction? they cover. same The to we've on so from lower of of place we over magnitude could X the that to anywhere couldn't think cover, of if out-of-stock down, the to another it's consumption on that view a would XX go largely are good question weeks significant you of and that in yes, cover -- amount of last

I question, we for broadly, most not think follow market-leading competition them everybody largely and there pricing we the that the part in would have seen for led categories are we've opportunity same wasn't to I pricing say an most inflation because the which because follow. with in input of cost really was compete. the the On dealing we brands

fully if maintaining monitoring react to that selective are And businesses there will share. cases market priced where we're sure and selective those we followed. not appropriately we and to, we However, competition we are has our situations. need And make

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

day. You may now great disconnect. a Have