Newell Brands tumbles 9% on weak sales, flat 2026 outlook
Consumer goods maker posts in-line Q4 earnings but core sales decline 4.1% as price hikes weigh on volume
Newell Brands shares plunged as much as 9% in pre-market trading on Friday after the consumer goods maker delivered fourth-quarter results that barely beat expectations and issued a cautious outlook for 2026 that disappointed investors seeking evidence of a meaningful turnaround.
The maker of Sharpie markers, Rubbermaid containers, and Coleman camping gear reported normalized earnings per share of $0.18 for the quarter ended December, matching analyst estimates. Revenue reached $1.9 billion, narrowly exceeding the consensus forecast of $1.88 billion, according to Seeking Alpha.
But the headline numbers masked deeper concerns. Core sales declined 4.1% year-over-year, continuing a troubling trend for a company that has struggled to reignite growth amid persistent inflationary pressures. The sales drop reflects what management described as the ongoing impact of previous price increases weighing on consumer demand, even as those same price hikes have helped bolster margins.
Looking ahead to 2026, Newell Brands projects net sales to remain essentially flat, with guidance ranging from a 1% decline to 1% growth. Normalized earnings are forecast between $0.54 and $0.60 per share, with the midpoint matching analyst expectations of $0.58. For the first quarter, the company anticipates core sales to decline between 5% and 3%, citing unfavorable shipment timing as a contributing factor.
Perhaps the most encouraging element of the outlook is the projected 40% increase in operating cash flow to a range of $350 million to $400 million, suggesting that the company's efficiency initiatives are generating meaningful improvements even as top-line growth remains elusive.
The muted 2026 outlook comes as Newell Brands continues to execute a turnaround strategy initiated in 2023, focused on enhancing commercial capabilities, driving innovation in core brands, and improving operational efficiency. A global productivity plan approved in late 2025 targets annualized pre-tax savings of $110 million to $130 million by the end of 2026, achieved through a 10% reduction in global workforce and the closure of approximately 20 retail locations, according to Business Wire.
The company has also been working to mitigate the impact of tariffs, which it estimates will cost $115 million in 2025 before mitigating actions. Newell Brands has been reducing its dependence on China-sourced goods, aiming for them to represent less than 10% of the cost of goods sold by the end of 2025. Previous price increases, implemented to offset tariff and inflation pressures, have helped expand gross margins to 32.5% in the first quarter of 2025 from 31.0% a year earlier, but at the cost of volume.
Analyst sentiment on Newell Brands remains divided. The stock carries a consensus "Hold" rating from 10 brokers, with price targets ranging from a low of $4.25 to a high of $9.00, according to MarketBeat. The average target of $5.94 suggests potential upside of approximately 32% from current levels, assuming the company can deliver on its turnaround strategy and eventually return to sustainable growth.
Some analysts have pointed to positive momentum in Newell's Coleman business in Japan and recent investments in product innovation and marketing as potential catalysts. However, skeptics highlight the persistent sales declines across segments, including a 10.9% drop in the Outdoor and Recreation segment in the second quarter of 2025, as evidence that the turnaround faces significant headwinds.
The company's strategy increasingly focuses on its largest and most profitable brands, targeting mid and high-price point segments and seeking to engage younger consumers. Expansion into faster-growing international markets, particularly Latin America and select regions in Europe and Asia-Pacific, is intended to diversify revenue away from heavy reliance on the U.S. market.
Investors will be watching closely to see whether the operational efficiency gains and cash flow improvements can eventually translate into the revenue growth that Newell Brands needs to justify its current valuation. With 2026 guidance essentially flat, the pressure is on management to demonstrate that the productivity initiatives and strategic pivot toward premium brands and international markets will bear fruit in the coming years.