Newell Plunges on Forecast That Revenue Will Decline This Year
(Bloomberg) -- Newell Brands Inc. shares slumped 15 percent in early trading after the consumer-goods maker warned about another year of revenue declines as continues to reorganize its business.
- Net sales will be $8.2 billion to $8.4 billion this year, the company said Friday. That’s down from the $8.6 billion it reported for last year. The forecast also missed the lowest of analysts’ projections.
- Newell, which makes a wide range of products from Crock-Pot slow cookers to Sharpie pens, is in the midst of a turnaround plan that includes selling businesses to slim down and simplify its portfolio of brands.
- It agreed to sell two businesses last quarter -- yearbook and class ring maker Jostens, as well as Pure Fishing, a tackle and reel company.
- It looks like more divestments may be on board for this year, with Chief Executive Officer Michael Polk saying in a statement that 2019 will be “another year of significant portfolio and organization transformation.” He didn’t elaborate.
- While cost management and pricing will help prop up margins going forward, Polk did cite the negative impact from retailer bankruptcies, currency swings, inflation and tariffs.
- The shares tumbled as low as $18.52 in premarket trading. If the decline persists after the open, it would erase most of the gains of the stock this year.
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