Newell Brands (NWL) 9 Feb 242023 Q4 Earnings call transcript

Good morning, and welcome to Newell Brands' Fourth Quarter and Full Year 2023 Earnings Conference Call. [Operator Instructions]. Today's conference is being recorded. A live webcast of this call is available at ir.newellbrands.com.

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

morning, to Good earnings Brands call. everyone. you. Newell Welcome year-end Thank

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

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

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

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

turnaround capability clear on how and of as brand Newell's and we the XX strategy, by conducted in in which Thank choices. brands choices to which where the thorough on were honest corporate significant of part our XXXX, earlier to recap in in of top and excellence company-wide gaps and brutally to top XX disproportionately deployed and you, have want our during commercial go-to-market a a unveiled Good These investing front-end assessment innovation, informed with win morning, capabilities. XXXX a play markets set brief welcome June, a and to new progress Sofya. In everyone, year-end start focuses we building comprehensive call. I made agenda. we introduced

and progress all corporate model, Following to innovation, ensure and changes company. even areas business, deployment new our further across of brand region, functions. to the operating clarity announced cascade the functional excellence to of strategy, proceeded areas and we and and direction consistency of the to and accelerate integrated across as back-office designed while month, key Last into fully we go-to-market brand such capability in standardization supply building scale efficiencies chain additional driving strategies

planning brand As management brands now we XX cross-functional this part as our brand strategy management, rigor well supply allows ambitions. place functions. and a holistic consumer our shopper and each up top in at established have brand, teams, stood move multifunctional evolution, of and of finance, and heart operational support is keeps all chain This on spanning appropriate for consumers ensures financial brand and we for organization customer drive to as insights and do the

partnerships, plans. the sales centralized Newell as simplifying the our the Chief joint our interactions further Officer, teams on customers with X Customer we under top allowing Newell's Building realignment, additional organizational of of approach domestic success reinforcing and for part business retail One

also development business new with existing with customers. driving We created and expanding customers a team focused new on categories distribution

portfolio while category growth of our serving both Newell's changes accelerate our leverage selling We customers. expect these and share to to teams partners will as better critical to best-in-class enable Newell's brands capabilities and leading market

growth benefits international fully model. particularly America. Europe the opportunity, represent harness key markets, sales which XXXX for scale we accounted and team across of Latin North visited an the the These XX go-to-market One America, about of X-month our in and of Newell's members period, embrace view that I attractive reinforced and XX% visits top Newell Newell's Over X if countries leadership an

simplifying and effectiveness organizations, their further are of ownership. which and to will agility, goal delivery, a standardizing we accelerating focus with speed, As pivot Newell's the commercial regional result,

talent across close and significant to build-out. progress We've the skill made organization upgrading gaps accelerate capability

We across Chief The company. have the latest and include HR majority to team & the wealth a hires Outdoor bring well business, new who critical a knowledge. relevant now Recreation the CEO executive of X leadership Officer; the as positions a filled as of both experience new of

them We are on excited to have board.

progress of We've XX the strategy. the chartered part each on we of as made new projects breakthrough corporate capability significant

that understanding function unlock under of claims. For will brought completely believe the innovations well we reinvented year. so as insights and customers, can example, we proprietary superior consumers leader last enable that in we a insights stronger this consumer new actionable We as with

We project tiering have put a big approach identify overhauled place around Newell's innovation biannual system and the in process also helps bets. that review

Our goal are launch lasting longer to fewer, margin and is innovations bigger accretive. that gross

Tier While health I'd made to but yet cutting about X the innovations have talk X we be, not funnel considerable on I'll coming the it to of they is identifying the tail, not the and where more these years. come as like for market. just also progress,

brand To for considerable and brand foundational consistent communications, Newell. strengthen compelling market-leading effort into brands into capability put our a building we've building with brand management

upgrading with addition to in we standards manager brand put brand In place clear KPI-driven performance for managers. expectations talent, all exceptional

omnichannel our that on of execution evaluate a so product packaging, out rolled value. advantage performance, also pillar brand we communications, relative competitive brands and competition, can We to framework

returning of corporate driving a to winning marketplace. accountability, set implemented the sense and values urgency in a we focused Finally, serving on the better increasing company of new consumers,

move win. have and our will required speed continue and to action strategy We strengthening to and agility while to developing been capabilities with the

sequentially situations pricing came numbers year of latest driven all our across by our action line Turning Sales outlook to untenable. and each productivity quarter financial positively driven in in of gross in July margin stronger-than-expected improved were performance half, proactively U.S. expectations, metrics. back demand. unit key Full ahead Normalized record-setting the and economics with address ahead where to the were either inflected or results. by

versus $X.X in of we $XXX billion increased flow XXXX, as million out forecast cash inventory. our about ahead Operating took

XXXX Phoenix, inflationary net mitigate out ending XX,XXX unlocked savings pressure drive $XXX driven flow. to debt XX% on complexity by million overheads, We down helped SKUs cash through pretax $XXX we about over which reduced and with of strong year-over-year. million, by approximately continue We about Project

are decline with to we XX% the with in the of we it business, even satisfied from XX% for close contraction sales significant core progress we the that actions. not XXXX, pleased category inventory are While as stemmed and retailer estimate

share the at that company sustainable laser-focused been profitable and pace growth more our gains We precisely to and why strategy. is broad-based we are moving have on implementing returning in and

XXXX. to Turning

to creates challenging operating environment. expect remain dynamic macroeconomic consumers pressure remain backdrop as under geopolitical uncertainty We the a and

to that continue as much Newell's as assumes contract, albeit categories not year. last outlook Our

We tightly also and discretionary in continue categories. to believe will retailers manage inventory durable

agenda the on for Within this plan to context, major priorities continued and strong X established have drive we XXXX. progress turnaround

First, organization of cultural operationalize new talent and brand includes This and model, meaningful continue to capabilities portfolio operational better and our excellence. stronger the of brands. leading fortifying the full to strategy building operating and our potential unlocking organization, innovation, enable

line results improved basis the sequential starts top and in to yield a performance market on tangible marketplace. share Second, as the work capability

and the organization the realignment initiatives. projects by the margin realizing and improvement, benefits a advantaged via savings strong delivering efficiency scaled gross from supply in while other made progress on margin and half XXXX chain productivity second Phoenix also Third, and anticipated operating of building from drive Project

focus the Within operating balance continue cash conversion Fourth, fund improvement across with complexity the sheet count flow. fully to cash driving a business and we to to reduction continue build on necessary simplification enablement are improvement improve cycle standardization organization. SKU technology and the delever reduce all by high-return runway. productivity process through strong and a restructuring multiyear redesign projects And and this, the accountability, capability to lastly, continued planning

commercial chain, across improved inventory, record cash count XXXX, further flow by actions we capabilities. to Newell's and Amidst strengthen supply took environment the significantly challenging the operating reduced company's during the decisive SKU drove productivity rightsizing front-end

I behalf resilience, our bold would of leadership team, that and our tangible actions bolster stakeholders. employees despite change progress the its performance we agenda. commitment grit to to embraced the our more broadly express and improve the for shown new On appropriate have and taking all strengthen of tremendous agenda are financial like value who turnaround our The and to create organization, strategy our have strategy confidence a on gratitude entire

now over Mark. the I'll to turn call

Good Chris. everyone. morning, Thanks,

segment and expected XXX margin X%. core than the down quarter fourth targeted in the year improvement We of Commercial financials. net a across improvement single primarily in the put, well our versus on are the economics XXXX story business normalized the financial sales improve to a the we the gross such in selected the roughly low at in July were made is the sites economics achieved have showing labor better of ago. underlying evidenced to of force important of as business, the believe the as While U.S. in basis point high up by interventions Home clearly manufacturing double-digit structural the pricing & the dramatic Simply action most business, XX% reduction structural underlying as as

XX% XXX pressures and normalized earlier, a reduction of The improvement sustained as the resulting impressive. to our impact actions system retailer core company's exceptionally represented delivered course sequentially unilaterally removed combined year of quarter of fourth was approximately productivity of in the which even by consecutive $XXX a in of despite nearly year-over-year basis mentioned due point quarter we margin fourth and points this of XX.X% The and organization significant lower quarter the contraction. category volumes chain gross Remember, Chris over second more the capacity on the expansion talented sales year on volumes. supply makes XXX utilization million when had with reduction, the inventory from throughout basis our inventory

we helped now with fourth strategy basis this incentive points margin Fourth $XX savings impact point partially higher Encouragingly, quarter front, operating SG&A the in a X.X%. quarter of to the the meaningful quarter, top which believe since in second line. XXX providing deleveraging On and expanded the operating on place. normalized margin right which realized weaker million normalized proof another SG&A Phoenix of increased from time that benefit Project XXXX, offset has compensation also is the were first the is is

tax share $X.XX. fourth increased normalized all due $XX expense discrete of higher the a which million, per to net $XX and brought normalized $X interest During versus benefits last of benefit earnings interest tax million at to in million diluted quarter, yielded year rates

$X.XX the previously than considerably Importantly, $X.XX better to this outlook provided. was we

operating fourth million, to cash Turning versus XXXX. an was $X.X generated cash operating million of quarter, billion flow. increase to year the bringing in full flow $XXX $XXX

at was financial recall flow the of will cash that XXXX, priority. You improving start our #X

X.Xx So team metric year the during this gross over-delivered flow cash anticipated despite critical greater debt to Strong we from at occurring $XXX quarter. $XXX end us end to very allowed fourth over on than million that the headwinds. between that which reduce million of originally the of QX helped the and at are macro about QX. ratio with of pleased the by third our lower X.Xx reduction the leverage

earnings XXXX. the evergreen changed XX were expansion to target be and sales since ahead fiscal Turning with following below we not for basis up of of have low digits, core points. last Consistent margin call. XXXX said expect the down single We our our with year-over-year XXXX. expected Expectations operating to of target evergreen this,

X% Core to X% reasons. X% sales and net X primary for X%, sales are to respectively, expected decline to and

in we First, contract low digits average categories XXXX. our to expect on single

as While this we XXXX. single-digit high considerably wish is a the this the view case, nonetheless in since than optimism source wasn't experienced of contraction better this we

to by losses about product to distribution some gains business Second, decision businesses. our we distribution to unprofitable expect due line and X exit points exits structurally exceed

Finally, in extent, expected category exits. by and difference core that versus exchange net the primarily a to is sales X-point foreign driven lesser note please unfavorable

improvement headwind driven of more be normalized margin at evergreen midpoint normalized We a gains margin another from of year the than each should which operating world-class basis The Xx offset point productivity point X, for improvement pricing expected annualization gross is basis our as expect XXXX low year. inflation. XXX and in which margin a increase by the the improvement, between single-digit and calls operating represents which X.X%, action XX X.X% target, July an strong

for given pricing, years, are prior the on level the reinvestment Newell's the margin going margins behind mentioning touched it provide the just in gross company's to gross business bears committed to Having degradation fuel that in forward. necessary restoring fully we

actions However, our positive XXXX. reflect pricing guidance incremental any does not significant during

Project to costs will we meaningfully close which sales. absolute a our as expect more of term. segment, corporate will critical control, terms, elevated expect sales should top inflation combined percentage brand than as and line Phoenix should stay Despite overhead regional capabilities in incremental costs several realignment organizational short SG&A, down The our robust XXXX flat overhead the more percentage support from the to enhance keep to savings and contraction be being investments to we made required and core Within offset wage a a and new anticipated incur sales functional cost professional of dollar in series in in of benefit recent strategies.

represents of advertising balance promotion and the expense, Outside of overhead SG&A.

in improvement and activity We we are funnel more absolute in more of terms our disposal. see both sales planning a at to as have building and spend as opportunities to investable brand and are beginning innovation percentage therefore, our dollar

and XXXX, expense is mid-teens. are our we interest tax steps $XX $XX For million rate that in assuming million that by up the to

in, of in in XXXX. per the Importantly, benefit million we $X.XX. of normalized to this share compares range to $X.XX All expect earnings a diluted $XX tax

$X.XX this not share at first that the Now compare recorded. just we'll be to admit the per first glance, favorably to does

year-over-year is good the versus which we tax accounted for, year, represents a of high turnaround. However, in our growth midpoint believe represents once differential single-digit range last $X.XX corporate this progress

the we generate level $XXX year, XX cash million not cash cycle, in excess flow when inventory was XXXX the removed our expect of at conversion cash during just achieved record and dropped conversion million of to operating improvement cycle $XXX $XXX nearly days. by another This assumes For range Newell's meaningful million. to

million cash charges. range to in about million $XXX also restructuring Our related flow and operating $XXX includes cash

taken Newell initiatives of Frankly, optimization aggressively considered thoughtfully Phoenix, with the the and compelling, of but we Project transformation restructuring down associated move are multifront efforts, network all decision the but briefly Brands. a was with to organizational slowing realignment some so forward rates other project, the return

projects fiscal plan be turnaround. economics the about $XXX further will During in to million business structural the XXXX, invest we expenditures, accelerate cost-saving improve of the of on most to which capital high-return spent and

our cash expected numerous funding an by year, use balance a leverage reduce and cash a we in internal high-return typical meaningful return strengthen plan projects, the fully first second the to seasonal the cash sheet half of of to more characterized our While ratio also pattern, with flow by followed half. in generation

leverage ratio end we midpoint year Newell's towards Xx QX. to will before move increase of by of the dropping about likely as the the

of and achieving status continue remain Long additional a X.Xx. about in wanted to flexibility. we the term, But target committed investment-grade we to ratio create to meantime, financial leverage

with quarter. fourth even all at So though we we fully proactively of Newell's amended the of were the end revolver, terms covenants the compliant

to earlier As provides a result facility, of facility revolving $X which this we forward. the amendment, going which a week, billion secured us the was converted was finalized believe with ample liquidity

XX% flow cash significantly productivity evergreen exceed Free our target during XXXX. is expected to

first core start performance improve largely to as to sales exit should Please and XX% forward. with net quarter market X-point decision last the capability sequentially to be note expect our relates as it sales at benefits from As due can net the greater between of XXXX, well to X% unattractive businesses, X- the we the as year X%, from year. quarter versus first to the of weaker going to attributed decline X% share full build-out to the sales a down assumptions of our impact some difference a core distribution losses year that structurally

As with core the is year, net difference category the full extent, driven a versus by in lesser to unfavorable exits. expected foreign X-point exchange primarily and sales

a represent operating versus midpoint For which XXXX, the X.X%, we of X.X% XXXX. margin expect XX would to quarter at improvement point normalized the of first basis

to much favorable expect largely variance to expand impacts the margin and last FX gross versus capitalized not quarter, nearly continue although We in fourth as to as adjustments. due year, less

up decline, by incorporating but down be the A&P, a help, than $X.XX. interest should should the less of SG&A more margin a higher spending of expand. despite to tax anticipated a expense sales modest dollars range After in as ago year SG&A amount be and diluted percentage sales versus because Total share slightly the we were a looking should per for gross normalized $X.XX loss of on

due QX is the to year seasonality. said, of That Newell's quarter smallest typically

of multiyear is margin put stronger it result, of during trends. which closing, As believe a has the full operationalize the the to corporate business dramatically attributes deal was strategy Newell's required as laid of the journey much a XXXX, groundwork part set accomplished great our we strengthened XXXX not In organization frame business capabilities, year cultural financial and new going performance the in and company's of core with processes fully forward. so, and doing sound right inclusive indicative to

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

[Operator first Your Falorni Instructions] comes Filippo question from of Citi.

can here, you business. there's I guess have you front, in So of been have clearly, as like your top the confidence particularly us what in sense trajectory some top reduction last give external a start you year? the inventory of line of you or lot line what the challenges visibility on cycling a

Thanks, Yes. Filippo.

Let that. me take

rate growth which an decisions single Mark digits. sequential We're headwind 'XX. expecting in And are which think X if made XXXX are proactive in to of alluded improvement 'XX look good high exit a at was business market is remarks, where businesses, guidance, the versus guidance. points improvement We're in the I market down in you to down the expecting really we as performance unprofitable we've X growth we expecting digits, the is a believe sales that line sales to the be low versus top single from decision. prepared there's things about

majority X of from of And which then related. and exits, FX got about we've points is headwind category the FX

very I that think underneath shoots you I we're that next green there's would if expecting some go say that positive year. view,

place. at XXXX to of We're we teens, low market we our that driven the top into look number as share expecting in grew XXXX, by go capability X XX the about we if increase into brands. So on you put that improvements

XXXX, we've tiering are launched Tier X and initiatives, marketplace. initiatives we largest just X. X, X which the In X In innovation now were as had a X in the that established system that of initiative take Tier categories. Tier have XXXX, we I If example, an

Sharpie we It's The very we're us light acrylic excited a a about. started surfaces. dark first shipping new Markers, one weeks markers ago is on really which entry pop and for that few Creative category

and head working the and even than last better X X of this is X to to first the into be I can innovations it. pipeline see and still go we You come 'XX. expect what to X more sharpie.com as series that Tier much are in XXXX But pipeline about to get the and market. starting year, on we of are populating the is will stronger a

sales started real new market focused the put on make new we the pipeline 'XX. team And distribution very year over we already got to is top capability reason in business we've helped that also the customers line the strong on We as growth. core secured development development in progress the delivery over Part the into new Last a front. head business line incremental QX that in the actually with delivery. on on that of for 'XX

model as top of significant structure the that have for international that into we head line change also, as the poised simplification operating process next the international a part We simplified acceleration we've year, teams, growth believe is in business on with and redesign our the we made. the interaction and based

about progressing work are So, the very on. excited that we've and we been optimistic capability

XX to start year. had actions Those bear off increasingly line of believe forward. last we mentioned I as going are in up capability we the think fruit, initiatives of to are I show that capability and strategy starting to improvement kicked in that results the June launched new was going top part previously, breakthrough we

comes UBS. next Grom Peter Your of question from

for quick me. X ones Maybe

the the background provide agreement. the in anything there to Just Is the the themselves metrics some on first credit or read of are why Can covenants? changes amendment maybe on been the you the you at know QX, of risk credit in given weren't I on as cash have they cadence they you of but looking changing? flow? were an could Just the commentary ahead? issue mentioned kind on

about on But you maybe good gross kind given that some so, And achieve guardrails then, can think here? to XQ, margin the line. from the turning still you business, I longer I can mentioned obviously, just you the we term, frame high guess just second, robust provide And is if less how here you should XX% opportunity think maybe around of some that? could improvement target versus but achievable? progress when

respect looked that facility worth been were flexibility think words we all increased the step way way back the very I'll facility speaking, served just managing place we few to generally balance we a with with and the additional that we in to past better the debt. upon to in place. billion to it the predicated about replace it's company's sheet were important in right? put we've we and decided doing ones cash, feel financial million new covenants did But yes, by We I that that that, out our secured a having about $X.X looking of This it's we'd bring 'XX, good paid say existing see our we've be We some fiscal current work year, take cash by a year-over-year. understand for the what facility as $XXX been needed flow at down of that there.

to the flow I year we specific you on that let you exceedingly can is think -- just on If get strong follow message up was in ended. strong want more here bigger Sofya cash that. But with the individually that,

even place our than capital it so out continues to cash end our plans in further improve And continue that have year, where to great reduced really our and by have sits. We conversion currently leverage to drive the ratio of year-over-year. extract the we'll working cycle

of the say we On target sort is high the the is gross long-term margin. right XXs for I what that the gross side, margin believe would company still

margin gross think about I versus of had talked about XX%. ended XX%. number XXXX we We previously at flat XXXX or XX% with a

the for because up productivity margin, of gross the are we're at op in initiative margin number gross three, year is more improvement across we to two, basis margin terms business, of If that. savings And parts continue guidance to across unattractive look Number portfolio. XXX accretive structurally of drive innovating the than be the record innovation. one. to expecting points reason next proactively of you we've number exit in the And chosen we

initiatives, if significant example, X X improvement to the initiatives X that for launch X of every Tier margin it's have versus to X gross we planned So you is and this a look year, in. business the that at the

expect benefit driving innovation up them mix will the as portfolio And gross you think on ramps drive put operating basis things, start as to margin we points XXX the we're than well. those margin. that we together X guiding so And higher when

We in a get to choosing to are take good percent pipeline have innovation spend advertising behind and return of marketing as an actually expense higher money we a because sales 'XX and on.

you're as talked for back, and we've of money to dollar some ramps try as part plan as faster 'XX. to the us margin than the see investments So, both work our and in the previously, that a operating margin and going drive in A&P percent terms of sales capability of and is the capability ratio, gross up, invest increasing

Olivia Tong next from question Raymond comes of James. Your

there sales of from be the just a are a finishing higher initiatives, year the us first hit as give improvement year different timing view Because the of organic My obviously, Could would X% cadence question to just going earlier drive you in helpful. to talk about initiatives could progresses a the discussed around little lot X% quarterly down sort but particular, down is when these X% to the better of you to the the new you on sales to if sort X%? that of behind some talk P&L advertising about things mix, innovation. more bit

Yes.

initiatives I year. So will what say the year launching X would the this build X X, our Tier initiatives that breakthrough is that Tier during we're

and note they're drive for will a several platforms to the next X that's these build just thing. year, years. thing other not The just is Tier to but X multiyear about important one-and-done growth, that not are this initiatives These X, begin and

If in X% we're a the guiding X%. X% you decline, what to X% we're QX, to to be year sales at and to we're look core expecting guiding to

performance. started turn will see we've X, you're will marketing be shipping of we'll think year. in to Tier QX The a few Creative the going the March sequenced quarter QX. I and innovations, more got behind And advertising, one a QX, core So better the in Sharpie innovation we start we I that weakest really the show do the Markers, the the or of is expect as full mentioned sales on in during top, year, balance balance in weeks stores March, campaign it of ago. up the That well. that X

throughout you'll the to so about innovation line to in And year. excited begin we that as we've capability think start so on move year. the I we're see rate of those the some improvement build business driving show the we through will you'll that go pretty wins improvements on had funnel. up the top new as the significant we year. I build And as Likewise, see where development, the through the And go think, we're

to been don't could, other our has I like business talked business enough The about performing think than is if I thing international I'd fact the we international that because better our add, 'XX over expected we planning look up really is market process, business year-over-year. to international actually our the we are as because U.S. at excited be the year, the actually past and

about of our have, XX% this the a there really we there's So business at good outside U.S., point, to and story tell.

question of Truist from next comes Securities. Bill Your Chappell

stuff Writing, years [ this lot the be be first I down are you're this be as Outdoor, be us that, year? key a guess that Or so a growth? that much you I understand it's year? question get businesses to to is And Kitchen and just more the is, exiting it mean, doing help it what's like fears it guess, really we categories cutting can your and exits? or the total for done so actual expecting be And it these of before you've Chris, company much your it ] outlook Baby, growth. see cutting I back how of category do to

And going that question total Or is do on company any the horizon you there kind of is growth? you're too then see the concern top second far?

Bill. Thanks, Yes.

sort rate be X you to digits. of core on of the low sales X the growth single if of the and made I rate we're about parse drivers the growth think guidance. out that we're category exit business, or guidance, points market effectively down growth saying proactive choices to the planning thing, the what We've are

the up what effectively that share from share flat we're tangible from that guiding capability And online, that's market If we're you results. expect to coming exits because financial standpoint, to market the a year, that, exits, be are actions that choiceful is excluding excluding going that we this that up begin choiceful and in means show the making. is our back improvement to

look So guidance don't a choiceful you get that year. But we're into into if that give the you trajectory to be 'XX, go us if we the on, by 'XX. that we're behind at should making like beyond time we exits

so they our outside it's we are that what's more to headwind and think 'XX, happening the a At would but 'XX. even to versus positive capabilities time, in turn growth heading today. in the same experts be expect to categories, is into 'XX a I the unlikely the lot that be may rate for And hard of stronger predict category suggest where

our of market We brands market market more line grew on do on expect top top our on XX I XX we're grow half and of And our that about think to of brands 'XX, that share we got sight so of X our of brands. share to in than 'XX. going I mentioned our half of 'XX, in top -- in we've

and in the think clarity down by going low growth. the back see in year. We is for We've said more single that path going journey a trajectory. our significant a it's the strategy of financial what making growth. improvement. of because multiyear see to path we're of that rate a model, when digits sustainable And a place unveiled market tried in profitable to new we to and be was this tell for this things We so brand that end. But in you the business thing be new the on I our to we're bit the on to inside is be be we're happens uncertain front on assumption international, all strategy, little that built development go-to-market, to our capabilities talent can operating that is starting upgrade, capabilities guidance on the of we And we building, building forecast innovation, on on contribute. on that to the the The saying are prudent the the company changes those needed

I not just January will light in results, days, January of ourselves our plan get bit but and it's of based a we're a running but X ahead say going of to January, on the month the month. little early looking month ahead at is we're

is as up, looks Or has in I follow to And I trends take like mean, I category just share double as of how do we And it. probably I taking market your I year? forecasting you're -- that much. categories, back 'XX? don't mean, that this was it that probably changed we're happens, has these of digits we're something a more rate to be kind you year and it in until pre-pandemic like down assume think don't changed mean, core do they should at think much. mid-single that to just how XXXX? birth Baby I going just, digits kind guess normalizing and the getting last see look you your

Yes.

and market same get even them under a into people so that durable from that change when 'XX, predicting data pressure A that of forward-looking is and external And of food or being holding think people, predict spending from to have although suggest overall more the discretionary spending that if out. to standpoint which do of categories 'XX. I remains will those to a to in the essential most inflation. consumer which the but although and to because the is pressure rate we about although which hard you under you see we versus consumer into would normalize little 'XX, say a projected directed bit going lot I 'XX we our very -- lot that's of 'XX, headlines, categories. going of to either it's they're that commentary up you remain talk growth in true. it's still macro an most consumer And likely to are to lot, get services well, that view is is spending in is far improve that, essentials,

And trying in trying control. prudent. We're so that we're are the to things be our to take

Bed Baby impacted was particularly which negatively category, buybuy Baby & because the mentioned in and the 'XX Beyond You Bath of bankruptcy.

development doing the Baby One new as of Graco channel that business lead and opening our up with we're that things are expanding the team is we with into retail new brand. customers

at say help what that time. right back to about too going to but get are going to about share growth to category forward. growth now, We can't And so I think the to same there market see doing help we excited it Newell's much and are the things we're are that going try you're market pretty

a babies that also expand a are the U.S., little We we're lot more because there's more business of to very the centric, outside than internationally, and bit U.S. U.S. outside there a in U.S. inside opportunity have lot an the

business planned have for And couple already in so a exciting we launches of that country 'XX.

from Your Lieberman Barclays. of next question comes Lauren

trends little curious some merchandise course, know be it's difficult bit just the of the I trends so out We've in a had Was generalize. a about in general to which, category, U.S. talk call very retailers broad deflationary category, would to

the thinking that dynamics? So about what curious by and of kind be seeing activity it's kind a activity how retailers more you're year this just in bit you're step-up Whether drive may a of U.S.? little to pricing in encouraged promotional

Yes. Thanks, Lauren.

with this discussions retailers are active on having we So topic.

are in remarks not expecting we our to our costs, in 'XX, As go down. we input today, said prepared up

rate. inflation. are deflation guidance into inflation single-digit we input driven resin cost, inflation It's by is what our So not said, of a That things, bit we labor our a is baked period. in seeing have inflationary and low which more little transportation of of input That's a broadly costs. normalized little X inflationary bit terms being cost really a

we've businesses seeing ones retailers not And topic, they this deflation. understand with are think on as our that we're that had so I discussions

we not we're or not forward. environment we're what rollbacks as so either. go planning the price competitive we reductions in compete And significant of And any seeing in that really

there where compete. categories are think general I the merchandise which may in but in not of case, we be that parts the other

you curious said the mentioned wait Outdoor, kind you might be been but know it new might see I I sales going leadership weak. a there's that and on very then of The answer, been there? have for And be just Great. just guess. But what's Okay.

business Just announced because turn management curious of kind of anything taken see, you again, understand can sight and the articulate change, it's being about too. a we around, But [indiscernible] wait just there. kind if I to steps

Yes.

business is turnaround So that's a -- the the is need the most in our of Outdoor business Rec our & of any of segments.

not So different all the the very businesses from of in consistent capability processes They we're when clear in those and putting each points. became assessment, past did we managed our started it consistently, were that because starting now.

And so go the the businesses where to improving has you are drive Rec ability brand communicate look the if furthest brands innovate, build, Outdoor on to at its with regard excellence. and journey, & retail to

were point The that business would and opening price their I structurally more additional that business, the of had business U.S., was thing is say categories that in that on that, the particularly challenged.

that believe all building and action the be I so about drive is category a that in in of innovation growth. it It's business. we we have we that Outdoor responsive because significant excited in I'm And can Rec. taken significant the should are very long to category the applicable term, capabilities &

in a we're Chicago and & team, we've Atlanta. Outdoor leader, completely a effectively CFO, to the from sales Recreation, to we've a a but new of announced order we In business new moving leader haven't that, drive just new new brought marketing brought in

are so business. a significant upgrade intervention And we making to that

sales within to longer to going don't at level, in think if segment you're the core decline & Development take I expect you obviously, growth the Commercial. Learning & or sales we what see than & from turnaround would Home do the look guidance segments, provide I and Outdoor in Rec core to

but versus expect because in that of & relative but that the going X a of growth rate we already capability likely be And improvement amount do I segment. so 'XX on Rec to Outdoor it work some in have in the other relative improvement to laggard the -- segments 'XX will

And of JPMorgan. question Teixeira comes our next from Andrea

But more where line of Writing share of I of understand conservative cost I resilience some the you was can the of share. can be through we segments market to comment particular, some kind In also last seems been. has Outdoor, the spoke expectations of the what control. more of as categories you of sorted guidance? thinking that Commercial some Appliances, there saying, year, reduce also right, as category, now it top some getting start it in out share you are about this of your guide, category understandably what just far core there? in understand, & going anything you have and you every performance were the I section Be obviously had look to how you hoping as happened of up but maybe the are market as you new is how about that forward? benchmarking in that under quarter you this if terms leadership and terms

the will us these categories of other the wonderful. kind give key can union be that you of state If for

Yes. Thanks, Andrea.

prudent It's to happen to the going I a think way is I have predict don't It what's volatile time to better hard and is in or we the it. trying guidance else. than be the describe ball crystal environment, exactly macroeconomic unique is period. in we're a anybody certainly that would

think low be digits. in probably was the is in I to making we're markets 'XX which where it high versus are assumption the biggest that what improvement 'XX single that going digits, is we an single down saw

victory so plan, but X month. ahead after the to of month it's slightly of said, I we're January, far, running As too declare early in

good the I business this year. at our about If heading look into you Writing plan feel very units,

a are Creative Sharpie that have for We we have year. first the strong for mentioned the category hopes hopes innovations, Baby is year, Sharpie new and also launching I of high the for. X high innovation. I X Markers X which Tier that Tier this this have

in that think I normalized buybuy I plan the category. significantly have bounce-back bankruptcy. in And that a year last we category has from place think Baby

reset innovation in particularly the to this I Fragrance work and which We've in business lot done a And that the that Commercial. & done, business, Commercial in operating would in the margin year. think of business, gross include margin back some On that's see Kitchen structure and half that Kitchen, results particularly coming of the the Kitchen, Home coming last has year. business, can and exciting we've you through margin Home

Commercial more of a we sort going strength. from to business are that The business is stable strength

the fully to We Outdoor results. be in the the flattish have capability is the take build business & the time through year show that versus terms expect in to and place it's to that challenged then this more is mentioned to going Rec financial business of last us get going And because most that year I business of be year. this probably

could, this thing other I that The part would we forecasting bear. is, add, we've capability if to because brought is need capabilities have I the of the set better recognize to

best-in-class quarter-to-quarter, brand example, business for by walks build that order now So discrete sales different force using practices sales those units in and brand. up taken Anaplan from applied is building blocks the to broadly. the discretely really have on We've

buildups. in allows So the on us capability to it granular more set get much that place leverages putting also scale, but we're our

that how of putting you're focusing -- of helpful. I profitability, there indication R&D, R&D this given there year any where on is course And board, coming is moment any super of understand and were of a behind you that? indication getting Kitchen, across you is off money but in about more more mentioned That improving innovation, the

into Yes. We our -- plan. baked is that

organization So, January, is that and U.S. better business perhaps more I that development, should we were selling, that model have we But time to spent we new part in brand effort. operating announced cetera. little Also et changing the the of that. management, R&D enable a realignment announced on international, where

X%. we in we actually a invest needed and resources if announced R&D. realignment, of part and reduced those But a invested as look head more of back to than areas one head of where R&D standpoint. we back So, was within that, you reduction And by count capability net count is that from that, areas

within headcount. in we resources investing are more R&D, so of terms And

baked of spans multiple going we head count are sensitive. have can that them technology this it's announced span are in that disclose contribution a model technologies the and part our specifically, plan to that material earlier our upgrade earlier month and operating is And that all pipeline, to some guidance focusing and across innovation Newell. parcel we are things because into this R&D business and improving not and them these platform across We But change investment of the like on that do -- the competitively We're here, to units. year.

Brian comes from question Canaccord McNamara next Our Genuity. of

your about what's initial want. been We're relative Chris. far or one on X months to time typically than and take Maybe for more expectations? I'm than the What's expected view investors this your been curious turnarounds into new progress more strategy these made challenging? easier and so better

Yes. Thanks, Brian.

rapid I upgraded operating strategy. do cascade changed think to We've model. launch the capability to strategy we're We've very assessment made. incredibly the excited about to the at talent. We've the moved pace the progress

those frankly, of and things well All have gone, incredibly incredibly quick.

is because that operationalizing 'XX outcome-based change, that direction is entire the people this into is we and think We're of throughout of company, we're to executive of working that want I that's do it morning Newell, every think it seeing that's driving wake we the and when XX,XXX I we we reports, heading head we that just priority the because of direct And strategy new talked structure. are the a the I operating into all referenced to trying the more have do broadly I see at this change set the into embed I still culture the is urgency operating and the make now in are company. what signs a my driving good that. about now organization consistent outstanding that in model, which how piece so year. need to and the implementing think top strategy. What do performance-oriented, we as to committee, that across ahead work up the us about build operationalize -- thinking I of culture is that I an the

at the table you're today not, competitors And if And displace? are categories bringing you follow-up. just seeing have guys the Are any to to quick there a shelf what retail? you to space relative increase

Yes.

And shelf have We been increases to of because reviews line number largely our in visibility we, that. businesses. have XXXX are for the space good we pretty seeing a completed,

Sharpie and So example, behind Creative strong. has Marker the But keep initiative I back as coming to that very example. acceptance retailer been an the

expect trigger share believe to reinvention can growth number same We a the time. that gain growth, initiative. that as of incremental for with a of space not category also We're only on shelf working at but market market we retailers Newell result

business online, development product development that mind, comes example, new into examples a some went of I and The distribution. and The a is team which we One business is mentioned got food that is Well, Rubbermaid terrific sold incremental for the Store. new coming gaining on Brilliance, product. Container to good product have storage we've program,

So we're as listed We The previously not with Store. at doing an were Container now Store Container business example. The

starting and going examples space, gaining brand-building as could pipeline And on trend our improves, improves shelf development get that broader think continue our innovation new as is and improves, to accelerate. accelerate to category business management through a I we to field go XX our or as of capabilities those capability XX with types capability as and of of the where set we're retailers our

we those forward So that's the think we'll go goal. as And about I talk examples here. more

comes Deutsche today of Steve Bank. from question Powers last Our

for clarify. you, Two just to one questions. Mark, just

that a will U.S. international of this FX, up a Was kind dollar number prospect expectation it the sales being Or guess. be one? -- You positive is core in to I mentioned there of is growth offsetting comment? international, just year,

you. maybe then for And Chris,

the all the positive more into the starting sequential the exiting first is we quarter through is a to about talked and of how relative prospect through you year, Just, high exit figure are year? the Or go we steep what I'm that on the the declines rate at end expecting territory guess, there lower year in exiting at trying point way as least an at rate curve a contemplate improvements the out therefore, in you of guidance, the I exiting you to 'XX? as and year.

the as expect 'XX, One we fiscal core to digits, for investment done. mid-single for yes, back business Chris and community to quick and 'XX. be all really relates before your of it are as the as because think that is that up would quickly, was real the meaningful we said progress sales of I we to we net thing also half progress So impatient expect up be sales international takes the made during when is question course is. But believe important,

and you points, they're look at back our If XXX and in our go gross respectively. margin down op margin both XXX 'XX, basis and

third and 'XX, During in going quarter remaining the quarter. inflected on despite both during And Op to our fact are inflected 'XX, margin be the the sales during the margin gross line. fourth and gross top our the strong compression up margin op margin in 'XX that

we in some process working are through to this basic put to as a 'XX year So we fiscal we would stuff with deliberately we place. indicated being year which in fundamental had

period. talent that across place. still of to in changed than the growth in and to upgraded it's going while the capabilities and working going real structurally. it you're We've financials better And those seeing organization the put now 'XX, the improve appreciably be signs prior have the are to because in rate, to was continue going start of the We down ways

we're so should time 'XX, about it. get and actually excited quite we hitting cylinders, we all the to by And on out be

Yes.

question, inventory I think cetera. a destocking timing, the bit to of retailer shipment timing, the remain guidance little because base relative periods et choppy

we core in the the QX to of what guidance in say so expect year would growth And to as after sales I the expected relative said. we that balance is QX, we've than be better

after And sales at a and core of updating pace quarterly QX. us choppy, QX the between continue normal the to there, QX little quarter guidance of we'll this point. our year at we guidance it quarter I core certainly think sales weakest QX beginning but the stop I quarter. premature bit will And it's be talk be a expect to of from we'll about and by perspective, for growth the QX, guidance improve think the to on

our X% proactively X%. because sales in driving, X Mark the sequential in said, that chosen we to there's of really on exit. negative And to as XX% is core focus remember, But 'XX X% down growth points stuff from to improvement to X%, within

'XX. of excited as X year head if we focused that, think you about to course that guiding going from we the in the on think we're to exclude haven't X down over the so we're that's 'XX. into what the be really gets through were And not move And we're to year sort us which about done I for the core, of as and trajectory where we areas

So with And follow everybody. always, call. we'll anybody the up thanks, as after

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

may disconnect. a day. You Have now great