Sharpie Maker Newell Brands’ weak outlook sends its stock plummeting

Shares of Newell Brands (NWL) plunged more than 17% in intraday trading Friday, as the consumer products maker gave weaker-than-expected guidance as it struggles to realign its operations.

The maker of Rubbermaid kitchen utensils and Sharpie pens said it expects full-year earnings per share (EPS) of between 52 cents and 62 cents, below estimates, with net income falling 5% to 8% to a range of $7.48 billion to $7.73 billion.

The company noted that late last year it substantially implemented its Project Phoenix savings and restructuring initiative launched in January 2023. The effort was designed to “simplify the organizational structure, optimize the company’s real estate, centralize its chain functions including manufacturing, distribution, transportation and customer service, transition to a unified One Newell marketing model in key international geographies, and otherwise reduce overall costs.”

Last month, Newell had announced an organizational realignment, which it said is expected to “strengthen the company’s early business capabilities, such as consumer understanding and brand communication.”

Chief Financial Officer Mark Erceg said that despite “a challenging macroeconomic environment,” the measures the company is taking will strengthen its performance going forward.

In the fourth quarter, Newell posted EPS of $0.22, and revenue declined 9.1% from a year ago to $2.08 billion. Both exceeded estimates. Sales in its Home & Business Solutions segment fell 8.2%, while Learning & Development sales fell 7.7% and Outdoor & Recreation sales declined 21.8%.

Newell Brands shares fell 17.7% to $6.95 per share at approximately 3:15 p.m. ET on Friday. They have lost more than half their value over the past year.