Newell Brands (NWL) Q3 2022 Earnings Call Transcript

For the period ending September 30, 2022

October 28, 2022 11:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning, ladies and gentlemen and welcome to Newell Brands Third Quarter 2022 Earnings Conference Call. [Operator Instructions] As a reminder, 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, Vice President of Investor Relations. Mr. Tsinis, you may begin.

Sofya Tsinis

Thank you. Good morning, everyone. Welcome to Newell Brands’ third quarter earnings call. On the call with me today are Ravi Saligram, our CEO; and Chris Peterson, our President and CFO.

Before we begin, I would like to inform you that during the course of today’s call, we will be making forward-looking statements that involve risks and uncertainties. Actual results and outcomes may differ materially and we undertake no obligation to update forward-looking statements. I refer you to the cautionary language and risk factors available in our earnings release, our Form 10-K, Forms 10-Q and other SEC filings available on our Investor Relations website for a further discussion of the factors affecting forward-looking statements.

Please also recognize that today’s remarks will refer to certain non-GAAP financial measures, including those referred to as normalized measures. We believe these non-GAAP measures are useful to investors, although they should not be considered superior to the measures presented in accordance with GAAP. Explanations of these non-GAAP measures and available reconciliations between GAAP and non-GAAP measures can be found in today’s earnings release and tables as well as in other materials on Newell’s Investor Relations website. Thank you.

And now, I will turn the call over to Ravi.

Ravi Saligram

Thank you, Sofya. Good morning, everyone and thank you for joining us on our third quarter call. Following strong performance over the first half of the year, the company’s results decelerated in the third quarter, reflecting a tough operating environment as many retailers right-size their inventory positions, inflationary pressure on both the consumer and our business as well as the impact of a stronger dollar.

Additionally, Q3 performance was unfavorably impacted by customers shifting orders into the first half. As a result of these factors, core sales turned negative in the quarter, declining 10.8% on top of 3.2% growth last year. This had a corresponding deleveraging impact on normalized operating margin, which contracted 120 basis points year-over-year, despite strong progress on productivity and cost containment actions.