Newell Brands Q2 Earnings Beat on Sales Growth and Tariff Recoveries

Newell Brands Inc. NWL reported second-quarter 2026 results, with both top and bottom lines improving from the prior-year period. Both metrics exceeded the Zacks Consensus Estimate.

The company posted normalized earnings of 42 cents per share, up 75% from 24 cents a year ago. The figure surpassed the Zacks Consensus Estimate of 19 cents by 31.6%.

Newell Brands Inc. Price, Consensus and EPS SurpriseNewell Brands Inc. Price, Consensus and EPS Surprise

Newell Brands Inc. price-consensus-eps-surprise-chart | Newell Brands Inc. Quote

Net sales increased 3% year over year to $1,994 million from $1,935 million, exceeding the Zacks Consensus Estimate of $1,969 million.

The quarter benefited from broad-based sales growth across the portfolio, improved manufacturing efficiencies, tariff-related recoveries and continued cost discipline. These gains more than offset higher commodity and freight costs. Core sales increased 2.3%, marking the company's first year-over-year increase in both reported and core sales in more than four years.

NWL's Margin & Cost Performance

Normalized gross profit increased to $813 million from $688 million in the prior-year period, while normalized gross margin expanded to 40.8% from 35.6%.

Margin improvement was driven by approximately $100 million in pretax recoveries associated with IEEPA tariffs recognized in 2025, approximately $26 million related to IEEPA tariffs recognized in the first quarter of 2026, stronger sales and productivity initiatives, which more than compensated for inflationary cost pressures.

Normalized selling, general and administrative expenses reached $489 million, increasing 1.9% year over year from $480 million.

Normalized EBITDA increased 45% to $406 million from $280 million. Normalized operating income climbed 55.8% year over year to $324 million from $208 million, while normalized operating margin expanded to 16.2% from 10.7%. Improved gross profitability more than offset higher advertising and promotional investments during the quarter.

Newell Brands' Segmental Details

Home & Commercial Solutions generated sales of $903 million, up 1.2% from $892 million. The figure exceeded the Zacks Consensus Estimate of $901 million. Core sales declined 0.4% as strength in the Kitchen and Home Fragrance businesses was more than offset by weaker Commercial demand. Normalized operating income increased to $68 million from $44 million in the prior-year period, surpassing the Zacks Consensus Estimate of $40.2 million. Normalized operating margin expanded to 7.5% from 4.9%.

Learning & Development sales advanced 5.2% year over year to $851 million from $809 million, exceeding the Zacks Consensus Estimate of $828 million. Growth was supported by solid performance in the Baby and Writing businesses. Core sales increased 4.9%. Normalized operating income surged to $314 million from $207 million, ahead of the Zacks Consensus Estimate of $204 million. Normalized operating margin improved to 36.9% from 25.6%.

Story Continues

Outdoor & Recreation sales increased 2.6% year over year to $240 million from $234 million, in line with the Zacks Consensus Estimate. Core sales grew 3.7%. Normalized operating income declined to $9 million from $13 million and missed the Zacks Consensus Estimate of $15.9 million. Normalized operating margin narrowed to 3.8% from 5.6%.
The Corporate segment reported a normalized operating loss of $67 million compared with $56 million in the year-ago period. The reported figure was wider than the Zacks Consensus Estimate of $55 million.

Newell's Geographic Trends Remain Mixed

North America reported sales growth of 4.4%, while core sales increased 4.9% during the quarter. International reported sales edged up 0.3%, although core sales declined 2.7% after adjusting for foreign currency movements, divestitures and other items.

NWL's Other Financial Details

NWL ended the quarter with cash and cash equivalents of $209 million compared with $219 million a year earlier. Long-term debt totaled $4,536 million, while net debt stood at $4,797 million. Shareholders' equity was $2,451 million at quarter-end.

Newell Raises Its 2026 Outlook

For the third quarter of 2026, Newell expects net sales and core sales to grow 2-3%. Normalized operating margin is projected to be between 9.5% and 10.2%, while normalized earnings are expected to be in the range of 18-20 cents per share.

For fiscal 2026, the company now expects net sales growth of 1-2% compared with its previous outlook of flat to 2%. Core sales are projected to range from flat to up 1% compared with the earlier expectation of a 1% decline to 1% growth.

Normalized operating margin is now expected to be between 10% and 10.4% compared with the previous guidance of 8.6%-9.2%. The company also raised its normalized earnings outlook to 73-77 cents per share from the earlier forecast of 56-60 cents. In addition, it increased its operating cash flow projection to approximately $400 million, assuming that substantially all IEEPA tariff recoveries are received before year-end while incorporating the latest inflation assumptions.

In the past six months, this Zacks Rank #2 (Buy) company's shares have rallied 18.4% against the industry's 2.1% decline.Zacks Investment Research

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Zacks Rank and Other Stocks to Consider

Some other top-ranked stocks have been discussed below:

WD-40 Company WDFC engages in the provision of maintenance products and homecare and cleaning products in North America, Central and South America, Asia, Australia, Europe, India, the Middle East, and Africa. At present, WDFC carries a Zacks Rank of 2. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for WDFC's current fiscal-year sales earnings suggests growth of 9.9% and 7.2%, respectively, from the year-ago reported figures. WDFC reported a trailing four-quarter average earnings surprise of 18.3%.

BBB Foods Inc. TBBB provides spot products comprising food and non-food products, such as clothing, electronics, household goods, and others. At present, TBBB carries a Zacks Rank of 2.

The Zacks Consensus Estimate for TBBB's current fiscal-year sales earnings implies growth of 44.6% and 52.7%, respectively, from the year-ago reported figures. TBBB delivered a trailing four-quarter negative earnings surprise of 98.9%, on average.

Ryohin Keikaku Co., Ltd. RYKKY engages in the retail of household goods and food items in Japan and internationally. RYKKY currently carries a Zacks Rank #2.

The Zacks Consensus Estimate for RYKKY's current fiscal-year sales and earnings implies growth of 6.9% and 8.3%, respectively, from the year-ago actuals.

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