Newell Brands Swings to Profit Despite Sales Dip

Ticker: NWL · Form: 10-Q · Filed: Oct 31, 2025 · CIK: 814453

Sentiment: mixed

Topics: Consumer Goods, Earnings Report, Profitability, Sales Decline, Macroeconomic Headwinds, Operating Income, Cash Flow

Related Tickers: NWL, PG, KMB, CLX, HBI

TL;DR

**NWL's Q3 profit swing is a relief, but declining sales and operating cash flow mean it's not out of the woods yet – stay cautious.**

AI Summary

Newell Brands Inc. reported a significant turnaround in net income for the three months ended September 30, 2025, reaching $21 million compared to a net loss of $198 million in the prior year period. This improvement occurred despite a decrease in net sales, which fell to $1,806 million from $1,947 million, representing a 7.2% decline. The company's operating income also rebounded to $119 million from an operating loss of $121 million in the same quarter last year, largely due to the absence of a $260 million impairment charge on goodwill, intangibles, and other assets that impacted the prior year. For the nine months ended September 30, 2025, net income was $30 million, a substantial improvement from a $162 million net loss in the comparable 2024 period, on net sales of $5,307 million, down from $5,633 million. Cash provided by operating activities decreased to $103 million for the nine months ended September 30, 2025, from $346 million in the prior year, primarily due to changes in operating accounts like accounts receivable and accrued liabilities. The company continues to face macroeconomic challenges including inflationary pressures, soft global demand, and fluctuating interest rates, which are expected to persist.

Why It Matters

Newell Brands' return to profitability, despite declining sales, signals a potential stabilization for investors after a challenging period marked by significant losses and impairment charges. The absence of large impairment charges in Q3 2025 is a positive sign, suggesting asset valuations may be firming up. However, the continued decline in net sales and operating cash flow indicates that the company is still navigating a tough consumer goods market, facing competitive pressures and cautious retailer inventory management. This mixed performance could lead to investor uncertainty, impacting NWL's stock price and potentially influencing competitor strategies in pricing and inventory management.

Risk Assessment

Risk Level: medium — The risk level is medium due to persistent macroeconomic headwinds like inflationary pressures and soft global demand, which continue to negatively impact operating results and cash flows. While net income improved to $21 million from a $198 million loss, net sales decreased by 7.2% to $1,806 million, and cash provided by operating activities fell significantly from $346 million to $103 million for the nine-month period, indicating ongoing operational challenges.

Analyst Insight

Investors should closely monitor Newell Brands' sales trends and operating cash flow in upcoming quarters to assess the sustainability of its profitability. While the absence of impairment charges is positive, the decline in top-line revenue and operating cash suggests underlying demand issues. Consider a 'hold' position until there's clear evidence of revenue stabilization or growth.

Financial Highlights

debt To Equity
2.7
revenue
$5,307M
operating Margin
5.9%
total Assets
$11,287M
total Debt
$4,777M
net Income
$30M
eps
$0.07
gross Margin
34.0%
cash Position
$229M
revenue Growth
-5.7%

Key Numbers

Key Players & Entities

FAQ

What were Newell Brands' net sales for the third quarter of 2025?

Newell Brands Inc.'s net sales for the three months ended September 30, 2025, were $1,806 million, a decrease from $1,947 million in the same period of 2024.

Did Newell Brands Inc. report a profit or loss in Q3 2025?

Newell Brands Inc. reported a net income of $21 million for the three months ended September 30, 2025, a significant improvement from a net loss of $198 million in the prior year's third quarter.

What was the primary reason for the improvement in Newell Brands' operating income in Q3 2025?

The primary reason for the improvement in Newell Brands' operating income to $119 million in Q3 2025 was the absence of a $260 million impairment charge on goodwill, intangibles, and other assets that was recorded in Q3 2024.

How did Newell Brands' cash flow from operations change in the first nine months of 2025?

Newell Brands' net cash provided by operating activities decreased to $103 million for the nine months ended September 30, 2025, from $346 million in the comparable 2024 period.

What macroeconomic factors are impacting Newell Brands' performance?

Newell Brands is impacted by inflationary pressures, soft global demand, major retailers' focus on tight inventory control, fluctuating interest rates, and indirect macroeconomic impacts from geopolitical conflicts and new tariffs.

What is Newell Brands' strategy to mitigate tariff exposure?

Newell Brands is deploying a mitigation strategy to offset tariff exposure through actions including pricing adjustments, productivity improvements, and in some cases, relocation of manufacturing.

What is the current status of Newell Brands' goodwill and indefinite-lived intangible asset impairment testing?

Newell Brands' next annual test and review for impairment of goodwill and indefinite-lived tradenames is scheduled for the fourth quarter, specifically on December 1.

How much common stock was outstanding for Newell Brands as of October 27, 2025?

As of October 27, 2025, the number of shares of common stock outstanding (net of treasury shares) for Newell Brands Inc. was 419.2 million.

What are the seasonal variations in Newell Brands' sales and cash flow?

Newell Brands' sales, operating income, and operating cash flow are generally lower in the first quarter. The company typically generates the majority of its operating cash flow in the third and fourth quarters due to seasonal variations in results, timing of compensation payments, customer programs, and working capital.

What new accounting standards are Newell Brands evaluating?

Newell Brands is currently evaluating the effects of ASU No. 2025-06 on Internal-Use Software, ASU No. 2025-07 on Derivatives and Hedging, and ASU No. 2024-03 on Expense Disaggregation Disclosures.

Risk Factors

Industry Context

Newell Brands operates in a challenging consumer goods environment characterized by inflationary pressures and soft global demand. Competitors are also navigating these macroeconomic headwinds, requiring agile strategies for pricing, product innovation, and cost management to maintain market share and profitability.

Regulatory Implications

The company must adhere to financial reporting standards and disclose material risks. Compliance with accounting principles for asset impairments and debt covenants is critical to maintaining investor confidence and avoiding regulatory scrutiny.

What Investors Should Do

  1. Monitor sales trends and margin recovery
  2. Assess working capital management
  3. Evaluate debt reduction strategies

Key Dates

Glossary

Impairment of goodwill, intangibles and other assets
A charge taken when the carrying value of an asset on the balance sheet is deemed to be higher than its recoverable amount. (The absence of a $260 million impairment charge in Q3 2025 significantly contributed to the reported profit swing compared to Q3 2024.)
Operating income (loss)
Profitability from a company's core business operations before interest and taxes. (Rebounded to $119 million in Q3 2025 from a loss of $121 million in Q3 2024, indicating improved operational performance.)
Net sales
The total revenue generated from the sale of goods or services, net of returns, allowances, and discounts. (Decreased by 7.2% in Q3 2025 to $1,806 million, reflecting challenges in demand or market conditions.)
Cash provided by operating activities
The net amount of cash generated from a company's normal business operations. (Decreased significantly to $103 million for the nine months ended September 30, 2025, from $346 million in the prior year, driven by changes in working capital.)

Year-Over-Year Comparison

Newell Brands has shown a significant improvement in profitability, swinging from a net loss of $198 million in Q3 2024 to a net income of $21 million in Q3 2025, largely due to the absence of a $260 million impairment charge. However, this turnaround occurred despite a 7.2% decrease in net sales to $1,806 million. Operating income also reversed from a loss to a profit. Cash flow from operations has weakened considerably, and long-term debt has slightly increased, indicating ongoing financial pressures despite the improved net income.

Filing Stats: 4,746 words · 19 min read · ~16 pages · Grade level 15.4 · Accepted 2025-10-31 16:00:57

Key Financial Figures

Filing Documents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION 2

Financial Statements

Item 1. Financial Statements 2

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 22

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 32

Controls and Procedures

Item 4. Controls and Procedures 32

OTHER INFORMATION

PART II. OTHER INFORMATION 33

Legal Proceedings

Item 1. Legal Proceedings 33

Risk Factors

Item 1A. Risk Factors 33

Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities 33

Other Information

Item 5. Other Information 33

Exhibits

Item 6. Exhibits 34

SIGNATURES

SIGNATURES 35 1 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements NEWELL BRANDS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) (Amounts in millions, except per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net sales $ 1,806 $ 1,947 $ 5,307 $ 5,633 Cost of products sold 1,190 1,268 3,503 3,751 Gross profit 616 679 1,804 1,882 Selling, general and administrative expenses 492 536 1,471 1,518 Restructuring costs, net 5 4 22 40 Impairment of goodwill, intangibles and other assets — 260 — 266 Operating income (loss) 119 ( 121 ) 311 58 Non-operating expenses: Interest expense, net 83 75 237 223 Loss on extinguishment and modification of debt — — 13 1 Other (income) expense, net ( 6 ) 9 3 15 Income (loss) before income taxes 42 ( 205 ) 58 ( 181 ) Income tax provision (benefit) 21 ( 7 ) 28 ( 19 ) Net income (loss) $ 21 $ ( 198 ) $ 30 $ ( 162 ) Weighted average common shares outstanding: Basic 419.1 416.0 417.9 415.3 Diluted 423.5 416.0 422.4 415.3 Earnings (loss) per share: Basic $ 0.05 $ ( 0.48 ) $ 0.07 $ ( 0.39 ) Diluted $ 0.05 $ ( 0.48 ) $ 0.07 $ ( 0.39 ) COMPREHENSIVE INCOME (LOSS): Net income (loss) $ 21 $ ( 198 ) $ 30 $ ( 162 ) Other comprehensive income (loss), net of tax: Foreign currency translation adjustments 1 ( 2 ) ( 17 ) ( 61 ) Pension and postretirement costs 1 ( 3 ) 2 5 Derivative financial instruments 4 ( 1 ) ( 12 ) 13 Total other comprehensive income (loss), net of tax 6 ( 6 ) ( 27 ) ( 43 ) Total comprehensive income (loss) $ 27 $ ( 204 ) $ 3 $ ( 205 ) See Notes to Condensed Consolidated Financial Statements (Unaudited). 2 Table of Contents NEWELL BRANDS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Amounts in millions, except par values) September 30, 2025 December 31, 2024 Assets: Cash and cash equivalents $ 229 $ 198 Accounts receivable, net 943 878 Inventories 1,456 1,400 Prepaid expenses an

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