Newell Brands 2026 Q2 Earnings Call

Thank you, Michelle. Good morning, everyone. Welcome to Newell Brands' second quarter 2026 earnings call. On the call with me today are Chris Peterson, our President and CEO, and Mark Erceg, our CFO. Before we begin, I'd like to inform you that during today's call, we will be making forward-looking statements which 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, Form 10-Q, and other SEC filings available on our investor relations website for a further discussion of the factors affecting forward-looking statements. Today's remarks will also refer to 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 reconciliations between GAAP and non-GAAP measures can be found in today's earnings release and the tables that were furnished to the SEC. Thank you. With that, I'll turn the call over to Chris.

Thank you, Joanne. Good morning, everyone. Welcome to our second quarter earnings call. When we conducted our first enterprise-wide capability assessment three years ago, it was clear Newell Brands needed to rebuild the front-end commercial and operating capabilities required to compete effectively and grow consistently. That work included stronger consumer insights, a more disciplined innovation system, better brand management, improved category management, greater effectiveness of customer investments, and a simpler and more powerful go-to-market model. Those new capabilities built over the past several years are now taking shape and coming together in a mutually reinforcing manner. For example, consumer-led innovation, supported by higher levels of advertising and promotion and stronger retailer activation, is improving consumer demand and brand performance. Our innovation pipeline is broader and stronger than it has been in years.

Year-to-date, all six business units have launched tier 1 or tier 2 innovation, with more to come in the second half. We are on track to deliver more than 25 tier 1 or tier 2 innovation launches for the full year. More importantly, the process is now more consumer-led, more disciplined, and more closely integrated with our commercial plans. At the same time, stronger retailer relationships, better category management capabilities, and improved service execution are translating into distribution gains. As discussed last quarter, we expected the company to return to top-line growth in the second quarter, driven by stronger innovation, distribution gains, and improved brand marketing. These rebuilt capabilities are now showing up in our second quarter results, which represents an important milestone in Newell's turnaround.

We returned to year-over-year growth in both net sales and core sales for the first time in over four years, and results exceeded our expectations across all key financial metrics. Net sales increased 3% and core sales grew 2.3%, with both results above the high end of our guidance range. The improvement was broad-based, with five of our six business units delivering year-over-year core sales growth. In addition, seven of our top 10 brands and five of our top 10 countries delivered year-over-year sales growth. From a geographic standpoint, it was particularly nice to see the U.S., our largest market, leading the way, delivering approximately 5% net sales growth during the second quarter, which was the first time our domestic business has grown since COVID.

Total points of distribution across our U.S. business increased mid-single digits versus last year in the second quarter, providing tangible proof that retailers are responding to the stronger innovation, category plans, and execution we are bringing to the marketplace. Based on existing customer commitments and activity already underway, we expect distribution to remain a contributor to growth during the second half of the year. While distribution gains were strong in the U.S., perhaps even more importantly, point-of-sale trends were favorable, which means consumers responded well to our new innovations. Specifically, six of our top 10 brands delivered year-over-year POS growth in the second quarter, while eight of our top 10 improved their growth trajectory sequentially. We also continued to gain U.S. market share behind several priority brands including Graco, Sharpie, Expo, and Coleman, to name a few.

These results provide further evidence that stronger innovation, higher levels of advertising and promotion, and improved retail execution are translating into better consumer demand. From a segment perspective, Learning & Development was the strongest part of the portfolio, delivering nearly 5% core sales growth in the second quarter, led by continued strength in Baby and a return to growth in Writing. Baby delivered double-digit sales growth supported by strong consumer demand, increased distribution, and new product innovation. Graco continued to build marketplace momentum with U.S. POS increasing at a strong double-digit rate in the second quarter and market share growing 2.7 points year-to-date. The strength was broad-based across major retail channels and reflected strong continued consumer demand for our rotating car seat platform, including the EasyTurn family of products. NUK also delivered double-digit U.S. POS growth and gained market share, supported by stronger innovation and particularly good momentum in e-commerce.

Writing returned to core sales growth in the second quarter, supported by distribution gains, innovation, and stronger back-to-school execution. While the back-to-school season is still early, the initial read has been encouraging, with improved retailer execution, new distribution, and strong POS growth across several priority brands. We have seen particularly good momentum behind Sharpie. We continue to build on platforms such as Sharpie S-Gel and Sharpie Creative Markers through new colors, forms, and use cases, while advancing a strong pipeline across the broader writing portfolio. Home and Commercial also improved meaningfully. Kitchen and Home Fragrance returned to core sales growth in the second quarter, while Commercial remained below prior year but improved significantly versus the first quarter. Kitchen delivered its first quarter of core sales growth since early 2023, reflecting improved execution and encouraging consumer response across several priority brands.

Ball's canning business is performing strongly, supported by innovation, improved merchandising execution, and share gains across the measured channels, while Rubbermaid continues to benefit from strong consumer response to the Brilliance Glass platform. In Home Fragrance, owned channels delivered a second consecutive quarter of growth, and comparable retail stores returned to growth for the first time in more than a decade. These are encouraging signs. We remain focused on strengthening the consumer proposition and improving execution across the business. In Commercial, the business delivered a meaningful year-over-year improvement in its core sales growth rate during the second quarter. We are focused on strengthening execution and advancing innovation behind durable platforms such as Rubbermaid Commercial Products and Brute, while building on targeted distribution wins with key customers.

Outdoor and Recreation returned to core sales growth during the important second quarter outdoor season, delivering nearly 4% growth, with the U.S. leading the improvement. Coleman Snap 'N Go is a strong example of the consumer-led innovation we are bringing to market, addressing a real consumer need by making large-capacity coolers easier to store, transport, and use. We are also advancing innovation across our Contigo and bubba beverage platforms, with a focus on distinctive design and stronger consumer relevance. Our higher levels of brand support are increasingly being paired with more precise and engaging marketing. We are focused on building relevance around our strongest brands and innovations through programs that reach consumers in the right channels and create stronger retail activation. Coleman provides a strong example of how our marketing capabilities are becoming more visible.

During the quarter, the team moved quickly to capitalize on a viral consumer conversation around a fictional lazy river product, turning it into a highly relevant brand moment. The activation generated more than 90 million earned media impressions, nearly 48 million social impressions, and 2.8 million consumer engagements, largely through organic activity. It also attracted nearly 30,000 new consumer subscribers to our database. This is the kind of modern, culturally relevant marketing capability we are building across Newell, one that strengthens consumer engagement and helps keep our brands part of the conversation. In just a few minutes, I will turn the call over to Mark, who will walk you through our second quarter results and share our updated financial outlook. Before doing that, I want to provide some brief perspective on the macro environment. The consumer and category environment has held up better than originally expected.

Coming into the year, we assumed the categories in which we compete would decline about 2%. Category growth was down approximately 1% in the first quarter and was essentially flat in the second quarter, with the U.S. performing better than EMEA. Average selling prices across the market increased modestly in the second quarter, reflecting broad-based pricing actions by industry participants. Whereas at Newell, our approach has been selective and targeted, focused on specific products and categories where appropriate. Even with the better first half category performance, we remain somewhat cautious about the second half and are now assuming the categories in which we compete will decline about 1% for the full year. We expect Newell to grow faster than this, driven by the improved capabilities we have built over the past several years.

On the cost side, we've seen significant volatility in the external environment, with input cost inflation significantly higher than what we expected at the start of the year, and the tariff environment, which includes those issued under IEEPA, Section 122, Section 232, and Section 301, changing numerous times. In aggregate, current year input cost inflation, inclusive of all tariff impacts, is a meaningful headwind for the year, which we are more than offsetting with strong fuel productivity savings and restructuring actions. This is allowing us to bring compelling new innovations across our leading brand portfolio to market at prices that represent strong consumer value. Finally, I want to thank the entire Newell team for their commitment, agility, and resilience. The progress we delivered in the second quarter reflects the hard work of thousands of employees around the world who are bringing our strategy to life every day.