Newell Brands Inc.

07/31/2026 | Press release | Distributed by Public on 07/31/2026 14:12

Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of Newell Brands Inc.'s ("Newell Brands," the "Company," "we," "us" or "our") consolidated financial condition and results of operations. The discussion should be read in conjunction with the accompanying condensed consolidated financial statements and notes thereto.
Forward-Looking Statements
This report contains forward-looking statements within the meaning of the federal securities law. These statements generally can be identified by the use of words such as "intend," "anticipate," "believe," "estimate," "project," "target," "plan," "expect," "setting up," "beginning to," "will," "should," "would," "could," "resume," "are confident that," "remain optimistic that," "seek to," or similar statements. The Company cautions that forward-looking statements are not guarantees because there are inherent difficulties in predicting future results. Actual results may differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause actual results to differ materially from those suggested by the forward-looking statements include, but are not limited to:
•the Company's ability to optimize costs and cash flow and mitigate the impact of soft global demand and retailers' inventory rebalancing through discretionary and overhead spend management, advertising and promotion expense optimization, demand forecast and supply plan adjustments and actions to improve working capital;
•the Company's dependence on the strength of retail and consumer demand and commercial and industrial sectors of the economy in various countries around the world;
•the Company's ability to improve productivity, reduce complexity and streamline operations;
•risks related to the Company's substantial indebtedness and current leverage profile, ability to refinance upcoming bond maturities on favorable terms or at all, and potential increases in interest rates or changes in the Company's credit ratings including the failure to maintain financial covenants which if breached could subject us to cross-default and acceleration provisions in our debt documents;
•the impact on the Company's operations and financial condition resulting from the current global macroeconomic environment, including the impact of tariffs imposed by the U.S. and retaliatory tariffs imposed by foreign countries, and the Company's ability to effectively execute its mitigation plans;
•competition with other manufacturers and distributors of consumer products;
•major retailers' strong bargaining power and consolidation of the Company's customers;
•supply chain and operational disruptions in the markets in which we operate, including as a result of geopolitical and macroeconomic conditions and any global military conflicts including those between Russia and Ukraine and in the Middle East;
•changes in the prices and availability of labor, transportation, raw materials and sourced products, including significant inflation, and oil price volatility, and the Company's ability to offset cost increases through pricing and productivity in a timely manner;
•the Company's ability to effectively execute its turnaround plan, including the Productivity Plan announced in December 2025 and other restructuring and cost saving initiatives;
•the Company's ability to develop innovative new products, to develop, maintain and strengthen end-user brands and to realize the benefits of increased advertising and promotion spend;
•the risks inherent to the Company's foreign operations, including currency fluctuations, exchange controls and pricing restrictions;
•future events that could adversely affect the value of the Company's assets and/or stock price and require additional impairment charges;
•unexpected costs or expenses associated with dispositions;
•the cost and outcomes of governmental investigations, inspections, lawsuits, legislative requests or other actions by third parties, including but not limited to those described in Footnote 14 of the Notes to Unaudited Condensed Consolidated Financial Statements, the potential outcomes of which could exceed policy limits, to the extent insured;
•the Company's ability to maintain effective internal control over financial reporting;
•risk associated with the use of artificial intelligence in the Company's operations and the Company's ability to properly manage such use;
•a failure or breach of one of the Company's key information technology systems, networks, processes or related controls or those of the Company's service providers;
•the impact of U.S. and foreign regulations on the Company's operations, including environmental remediation costs and legislation and regulatory actions related to product safety, data privacy and climate change;
•the potential inability to attract, retain and motivate key employees;
•changes in tax laws and the resolution of tax contingencies resulting in additional tax liabilities;
•product liability, product recalls or related regulatory actions;
•the Company's ability to protect its intellectual property rights;
•the impact of climate change and the increased focus of governmental and non-governmental organizations and customers on sustainability issues, as well as external expectations related to environmental, social and governance considerations;
•significant increases in the funding obligations related to the Company's pension plans; and
•other factors listed from time to time in our SEC filings, including but not limited to our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other filings.
The information contained in this Report is as of the date indicated. The Company assumes no obligation to update any forward-looking statements contained in this Report as a result of new information or future events or developments. In addition, there can be no assurance that the Company has correctly identified and assessed all of the factors affecting the Company or that the publicly available and other information the Company receives with respect to these factors is complete or correct.
Overview
Newell Brands Inc. is a leading global consumer goods company with a strong portfolio of well-known brands, including Rubbermaid, Sharpie, Graco, Coleman, Rubbermaid Commercial Products, Yankee Candle, Paper Mate, FoodSaver, Dymo, EXPO, Elmer's, Oster, NUK, Spontex and Campingaz. Newell Brands is focused on delighting consumers by lighting up everyday moments. The Company sells its products in over 150 countries around the world and has operations on the ground in more than 45 of these countries, excluding third-party distributors. The Company has three operating segments: Home and Commercial Solutions ("H&CS"), Learning and Development ("L&D") and Outdoor and Recreation ("O&R").
Business Strategy
The Company continues to execute the strategic priorities identified through its 2023 comprehensive capability assessment. These priorities, grounded in defined "where to play" and "how to win" choices, are intended to drive sustainable improvement in revenue performance, margins and cash flow through a redesigned operating model, targeted talent investments and a renewed culture.
The Company remains in the execution phase of its multi-year transformation. The Company believes that actions taken during 2025 strengthened foundational capabilities across innovation, brand building, productivity and commercial execution, and the Company expects the benefits of these initiatives to continue to phase in over time.
Execution of the Company's strategy continues amid a dynamic operating environment, including shifting consumer preferences, heightened competitive intensity, changes in retailer inventory and promotional behavior, increased adoption of digital and artificial intelligence-enabled tools, macroeconomic and geopolitical volatility, cumulative inflationary pressures on consumers, rising oil and other raw material prices, tariffs imposed by the U.S. in 2025 and early 2026 as well as other countries' related retaliatory actions, and an evolving regulatory landscape. The Company continues to deploy mitigation actions, including pricing optimization, productivity initiatives and strategic manufacturing relocations, where appropriate.
The Company's operating focus remains on disciplined execution of its key priorities, including driving top-line improvement over time through product and commercial innovation and brand investment; protecting margins through productivity, procurement savings, overhead management and disciplined reinvestment; further deleveraging the balance sheet; improving cash flow and balance sheet strength through working capital management and capital allocation; and enhancing commercial and operational execution through complexity reduction, technology standardization, Enterprise Resource Planning System (ERP) consolidation, stock-keeping unit (SKU) rationalization and supply chain optimization.
As part of these efforts, in December 2025 the Company announced a global productivity plan (the "Productivity Plan") to further simplify processes, streamline overhead and reallocate resources to higher-value activities, including workforce reductions and retail footprint optimization. Employee separations in the U.S. were mostly executed by the end of 2025, with international actions expected to occur in 2026, subject to applicable local law and consultation
requirements. The Company also closed approximately 20 Yankee Candle stores in the U.S. and Canada in January 2026.
In addition, the Company continues to review its operating footprint and portfolio of non-core brands, which will result in future restructuring and restructuring-related charges.
Recent Developments
Update on Tariffs and Geopolitical Conflicts
On February 20, 2026, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act does not authorize the imposition of tariffs, invalidating tariffs imposed under that statute in 2025 and early 2026 (the "IEEPA Tariffs"). The ruling, however, did not address the availability, timing or mechanics of potential refunds. On March 4, 2026, the U.S. Court of International Trade (the "CIT") directed U.S. Customs and Border Protection (the "CBP") to facilitate refunds of IEEPA Tariffs. Subsequently, CBP commenced development of a process to facilitate the refund of previously paid IEEPA Tariffs, including applicable interest. Since the invalidation of the IEEPA Tariffs, the U.S. presidential administration has imposed additional new tariffs affecting the Company on a temporary basis under Section 122 of the Trade Act of 1974 and on a long-term basis under Section 301 of the Trade Act of 1974, and has also proposed the imposition of additional tariffs under Section 301.
The Company paid approximately $120 million and $20 million of IEEPA Tariffs during 2025 and 2026, respectively. The Company evaluated the probability and recoverability of IEEPA Tariffs previously paid and concluded that recovery was probable. Accordingly, during the second quarter of 2026, the Company recorded a receivable for the amounts previously paid, representing its best estimate of the expected refund for IEEPA Tariffs, with a corresponding reduction primarily to cost of products sold. During the second quarter of 2026, the Company recorded a pretax benefit of approximately $100 million related to IEEPA Tariffs expensed in the Company's Condensed Consolidated Statement of Operations in 2025 and a $38 million pretax benefit related to IEEPA Tariffs expensed in the Company's Condensed Consolidated Statement of Operations for the six months ended June 30, 2026 (including $26 million expensed during the first quarter of 2026).The aggregate IEEPA Tariffs receivable and an immaterial amount of interest, were recorded within prepaid expenses and other current assets in the Condensed Consolidated Balance Sheet as of June 30, 2026. See Footnote 14 of the Notes to Unaudited Condensed Consolidated Financial Statements for additional information.
Global economic conditions continue to be adversely affected by ongoing geopolitical conflicts, including the Russia-Ukraine and the Middle East conflicts. The Company has experienced increased costs for raw materials, transportation, energy, and commodity costs, driven in part by elevated fuel prices and global macroeconomic pressures. The continuation or escalation of geopolitical tensions, including expanded trade restrictions, sanctions, or other barriers to global trade, could adversely affect the Company by disrupting its supply chain (including changes in prices and availability of transportation, raw materials and sourced products), reducing consumer demand, increasing volatility in foreign exchange rates and financial markets, and contributing to localized or global economic downturns.
The Company continues to operate in a highly uncertain trade environment. Uncertainty remains regarding the potential long-term replacement of the IEEPA Tariffs and the scope and duration of any such replacement tariffs and other U.S. tariffs, as well as the risk of retaliatory actions by other countries and the evolving legal landscape. Changes in trade policy, related legal challenges and geopolitical responses could adversely affect the Company's costs, supply chain, operating results and financial condition.
See "Results of Operations" and Footnotes 1 and 14 of the Notes to Unaudited Condensed Consolidated Financial Statements for additional information.
Credit Revolver Refinancing
On July 30, 2026 (the "Closing Date"), the Company, Newell Brands Ireland Services DAC, as a subsidiary borrower, and certain domestic and foreign subsidiary guarantors entered into a five-year asset-based revolving facility (the "New ABL Credit Facility") with a syndicate of banks led by JPMorgan Chase Bank, N.A., as administrative agent, pursuant to an ABL credit agreement governing the New ABL Credit Facility (the "New ABL Credit Agreement"). The New ABL Credit Agreement provides for the New ABL Credit Facility in the amount of up to $800 million, subject to a borrowing base comprised of, without limitation, qualified cash, accounts receivable, inventory, equipment and intellectual property. The New ABL Credit Agreement also includes an uncommitted accordion feature whereby the Company can request certain lenders to increase commitments under the New ABL Credit Facility by an aggregate amount not to exceed $500 million, subject to certain conditions. Borrowings under the New ABL Credit Agreement may be used for working capital needs and other general corporate purposes, including, on the Closing Date, the repayment and replacement of the Credit Revolver (defined hereafter). On the Closing Date, the Company incurred $490 million of borrowings and used $490 million of such borrowings under the New ABL Credit Agreement to repay borrowings under and refinance and replace the Credit Revolver. See Footnotes 8 and 15 of the Notes to Unaudited Condensed Consolidated Financial Statements for additional information.
Results of Operations
Three Months Ended June 30, 2026 vs. Three Months Ended June 30, 2025
Consolidated Operating Results
Three Months Ended June 30,
(in millions) 2026 2025 $ Change % Change
Net sales $ 1,994 $ 1,935 $ 59 3.0%
Gross profit 812 685 127 18.5%
Gross margin 40.7 % 35.4 %
Operating income 283 171 112 65.5%
Operating margin 14.2 % 8.8 %
Interest expense, net 87 82 5 6.1%
Loss on extinguishment and modification of debt - 13 (13) (100.0)%
Other expense, net 1 5 (4) (80.0)%
Income before income taxes 195 71 124 NM
Income tax provision 89 25 64 NM
Income tax rate 45.6 % 35.2 %
Net income $ 106 $ 46 $ 60 NM
Diluted earnings per share $ 0.25 $ 0.11
NM - NOT MEANINGFUL
Net sales for the three months ended June 30, 2026 increased approximately 3%. Net sales were favorably impacted by contributions from launches of product innovation, distribution gains and stronger demand in certain markets. These favorable factors were partially offset by soft international demand. Changes in foreign currency favorably impacted net sales by $20 million, or 1%.
Gross profit increased by approximately $127 million, or 19% compared to the prior year. Gross margin improved to 40.7% as compared with 35.4% in the prior year, reflecting the recognition of a refund of approximately $100 million and $26 million related to IEEPA Tariffs that were expensed in 2025 and the first quarter of 2026, respectively. Gross
profit also benefited from an increase in net sales and gross productivity that slightly more than offset inflationary pressures.
Notable items, other than those noted above, impacting operating income for the three months ended June 30, 2026 and 2025 were as follows (in millions):
Three Months Ended June 30,
2026 2025
Restructuring and restructuring-related costs (a) (b)
$ 11 $ 12
Transaction costs and other (c)
6 2
$ 17 $ 14
(a)See Footnote 3 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.
(b)Restructuring-related costs reported in cost of sales for the three months ended June 30, 2026 was $1 million, primarily related to facility closures associated with previously announced but substantially completed restructuring activities. For the three months ended June 30, 2025, restructuring-related costs reported in cost of products sold and selling, general and administrative expense ("SG&A") were $1 million and $5 million, respectively, and primarily related to facility closures associated with various discrete initiatives as well as previously announced but substantially completed restructuring activities.
(c)Transaction and other costs for the three months ended June 30, 2026 primarily related to expenses for certain legal proceedings and completed divestitures. Transaction and other costs for the three months ended June 30, 2025 primarily related to hyperinflationary currency movements.
Operating income was $283 million, compared to $171 million in the prior year period. The improvement primarily reflects the factors that contributed to the $127 million increase in gross profit, savings from restructuring actions related to the Productivity Plan, and lower consulting and other professional service costs. These favorable impacts were partially offset by a $17 million increase in incentive compensation primarily due to improved performance relative to targets under the Company's Management Bonus Plan and a $9 million increase in advertising and promotion spending to support new market entry initiatives and new product launches.
Interest expense, net increased by $5 million due to higher interest rates and lower interest income. The weighted average interest rates for the three months ended June 30, 2026 and 2025 were approximately 6.8% and 6.3%, respectively. See Footnote 8 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.
Other expense, net for three months ended June 30, 2026 and 2025 includes the following items (in millions):
Three Months Ended June 30,
2026 2025
Foreign exchange losses, net $ 2 $ 1
Discount on factored receivables 6 7
Other, net (7) (3)
$ 1 $ 5
The income tax provision for the three months ended June 30, 2026 was $89 million, compared to $25 million for the three months ended June 30, 2025. The Company's effective income tax rates for the three months ended June 30, 2026 and 2025 were 45.6% and 35.2%, respectively. The income tax provision for the three months ended June 30, 2026 was impacted by certain discrete items, including a $24 million discrete tax expense, primarily attributable to the tax effect of the IEEPA Tariff refund recognized during the quarter for amounts previously expensed in 2025. See Footnote 10 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.
Business Segment Operating Results
Home and Commercial Solutions
Three Months Ended June 30,
(in millions) 2026 2025 $ Change % Change
Net sales $ 903 $ 892 $ 11 1.2%
Operating income 49 24 25 NM
Operating margin 5.4 % 2.7 %
NM - NOT MEANINGFUL
H&CS net sales for the three months ended June 30, 2026 increased approximately 1%, reflecting contributions from launches of product innovations, modest recovery in the Kitchen business and favorable order timing, as retailers shifted orders from first quarter to second quarter of 2026, primarily in connection with key reset events. These were largely offset by soft international demand. Changes in foreign currency also favorably impacted net sales by $18 million, or approximately 2%.
Operating income for the three months ended June 30, 2026 was $49 million as compared to $24 million in the prior year, reflecting the recording of a refund of approximately $30 million and $11 million associated with IEEPA Tariffs expensed in 2025 and the first quarter of 2026, respectively. In addition, higher advertising and promotion expense, which increased by approximately $7 million, to support product launches and inflationary pressures, more than offset benefits from productivity and savings from restructuring actions.
Learning and Development
Three Months Ended June 30,
(in millions) 2026 2025 $ Change % Change
Net sales $ 851 $ 809 $ 42 5.2%
Operating income 308 202 106 52.5%
Operating margin 36.2 % 25.0 %
L&D net sales for the three months ended June 30, 2026 increased approximately 5%. Net sales increased in both the Baby and the Writing businesses. The increase in the Baby business was primarily driven by contributions from launches of product innovation and improved replenishment orders from major retailers. The increase in the Writing business was due to contributions from launches of product innovations and net distribution gains. Changes in foreign currency favorably impacted net sales by $3 million, or approximately less than 1%.
Operating income for the three months ended June 30, 2026 increased to $308 million as compared to $202 million in the prior-year period, reflecting the recording of a refund of approximately $63 million and $14 million associated with IEEPA Tariffs expensed in 2025 and the first quarter of 2026, respectively. The improvement in operating results was also due to higher net sales and gross productivity. These favorable factors were partially offset by inflationary pressures.
Outdoor and Recreation
Three Months Ended June 30,
(in millions) 2026 2025 $ Change % Change
Net sales $ 240 $ 234 $ 6 2.6%
Operating income 4 8 (4) (50.0)%
Operating margin 1.7 % 3.4 %
O&R net sales for the three months ended June 30, 2026 increased approximately 3%, mainly reflecting contributions from launches of product innovations and net distribution gains. The impact of changes in foreign currency to net sales was immaterial.
Operating income for the three months ended June 30, 2026 was $4 million as compared to $8 million in the prior-year period. The decrease primarily reflects a $4 million increase in advertising and promotion spending to support new market entry initiatives and new product launches. Operating income benefited from the recording of a refund of approximately $7 million associated with IEEPA Tariffs expensed in 2025, which was partially offset by inflationary pressures.
Results of Operations
Six Months Ended June 30, 2026 vs. Six Months Ended June 30, 2025
Consolidated Operating Results
Six Months Ended June 30,
(in millions)
2026
2025
$ Change % Change
Net sales $ 3,543 $ 3,501 $ 42 1.2%
Gross profit 1,325 1,188 137 11.5%
Gross margin 37.4 % 33.9 %
Operating income 317 192 125 65.1%
Operating margin 8.9 % 5.5 %
Interest expense, net 171 154 17 11.0%
Loss on extinguishment and modification of debt - 13 (13) (100.0)%
Other expense, net 12 9 3 33.3%
Income before income taxes 134 16 118 NM
Income tax provision 61 7 54 NM
Income tax rate 45.5 % 43.8 %
Net income $ 73 $ 9 $ 64 NM
Diluted earnings per share $ 0.17 $ 0.02
NM - NOT MEANINGFUL
Net sales for the six months ended June 30, 2026 increased approximately 1%. Net sales were favorably impacted by launches of product innovations across all segments, stronger demand in certain markets and favorable net pricing including a $25 million contribution from a refinement of estimates related to customer programs, reflecting better claims experience and improved deduction management. These favorable factors were offset by soft international demand. Changes in foreign currency favorably impacted net sales by $62 million, or 2%.
Gross profit increased by approximately $137 million, or 12% compared to the prior year. Gross margin improved to 37.4% as compared with 33.9% in the prior year, reflecting the recognition of a refund of approximately $100 million related to IEEPA Tariffs that were expensed in 2025. Gross profit was also favorably impacted by net pricing actions including the $25 million contribution related to customer programs discussed above and gross productivity, which were partially offset by inflationary pressures. Changes in foreign currency exchange rates favorably impacted gross profit by $11 million, approximately 1%.
Notable items, other than those noted above, impacting operating income for the six months ended June 30, 2026 and 2025 were as follows (in millions):
Six Months Ended June 30,
2026 2025
Restructuring and restructuring-related costs (a) (b)
$ 19 $ 37
Transaction costs and other (c)
14 4
$ 33 $ 41
(a)See Footnote 3 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.
(b)Restructuring-related costs reported in cost of sales and SG&A for the six months ended June 30, 2026 was $1 million each, primarily related to facility closures associated various discrete initiatives. For the six months ended June 30, 2025, restructuring-related costs reported in cost of products sold and SG&A were $4 million and $16 million, respectively, and primarily related to facility closures associated with various discrete initiatives as well as previously announced but substantially completed restructuring activities.
(c)Transaction and other costs for the six months ended June 30, 2026 primarily related to expense for certain legal proceedings and completed divestitures. Transaction and other costs for the six months ended June 30, 2025 primarily related to hyperinflationary currency movements.
Operating income was $317 million, compared to $192 million in the prior year period. The improvement primarily reflects the factors that contributed to $137 million increase in gross profit, savings from restructuring actions related to the Productivity Plan, and lower consulting and other professional service costs. These favorable impacts were partially offset by a $17 million increase in incentive compensation primarily due to improved performance relative to targets under the Company's Management Bonus Plan and a $14 million increase in advertising and promotion spending to support new market entry initiatives and new product launches.
Interest expense, net increased by $17 million due to higher interest rates and lower interest income. The weighted average interest rates for the six months ended June 30, 2026 and 2025 were approximately 6.8% and 6.2%, respectively. See Footnote 8 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.
Other expense, net for six months ended June 30, 2026 and 2025 includes the following items (in millions):
Six Months Ended June 30,
2026 2025
Foreign exchange losses, net $ 10 $ 2
Discount on factored receivables 11 13
Other, net (9) (6)
$ 12 $ 9
The income tax provision for the six months ended June 30, 2026 was $61 million, compared to $7 million for the six months ended June 30, 2025. The Company's effective income tax rates for the six months ended June 30, 2026 and 2025 were 45.5% and 43.8% respectively. The income tax provision for the six months ended June 30, 2026 was impacted by certain discrete items, including a $24 million discrete tax expense primarily attributable to the tax effect of IEEPA Tariff refund recognized during the quarter, for amounts previously expensed in 2025. See Footnote 10 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.
Business Segment Operating Results
Home and Commercial Solutions
Six Months Ended June 30,
(in millions) 2026 2025 $ Change % Change
Net sales $ 1,683 $ 1,704 $ (21) (1.2)%
Operating income 46 22 24 NM
Operating margin 2.7 % 1.3 %
NM - NOT MEANINGFUL
H&CS net sales for the six months ended June 30, 2026 decreased approximately 1%, reflecting soft demand in the Commercial and Home Fragrance businesses. These factors were partially offset by product innovation launches, modest recovery in the Kitchen business and favorable net pricing including a $17 million contribution from a refinement of estimates related to customer programs. Changes in foreign currency favorably impacted net sales by $44 million, or approximately 3%.
Operating income for the six months ended June 30, 2026 was $46 million as compared to $22 million in the prior year, reflecting the recording of a refund of approximately $30 million associated with IEEPA Tariffs expensed in 2025. In addition, operating income also increased due to net pricing actions, including the $17 million contribution related to customer programs discussed above, gross productivity and savings from restructuring actions. These favorable factors were partially offset by inflationary pressures and higher advertising and promotion expense, which increased by approximately $5 million to support product launches.
Learning and Development
Six Months Ended June 30,
(in millions) 2026 2025 $ Change % Change
Net sales $ 1,445 $ 1,381 $ 64 4.6%
Operating income 416 300 116 38.7%
Operating margin 28.8 % 21.7 %
L&D net sales for the six months ended June 30, 2026 increased approximately 5%. Net sales increased in both the Baby and the Writing businesses. The increase in the Baby business was primarily driven by contributions from launches of product innovation and distribution gains. The increase in the Writing business was due to contributions from launches of product innovations, net distribution gains and favorable net pricing including a $7 million contribution from a refinement of estimates related to customer programs. Changes in foreign currency favorably impacted net sales by $14 million, or approximately 1%.
Operating income for the six months ended June 30, 2026 increased to $416 million as compared to $300 million in the prior-year period, reflecting the recording of a refund of approximately $63 million associated with IEEPA Tariffs expensed in 2025. The improvement in operating results is also due to higher net sales, gross productivity and net pricing actions, including the $7 million contribution related to customer programs discussed above. These favorable factors were partially offset by inflationary pressures.
Outdoor and Recreation
Six Months Ended June 30,
(in millions) 2026 2025 $ Change % Change
Net sales $ 415 $ 416 $ (1) (0.2)%
Operating income (loss) (3) 3 (6) NM
Operating margin (0.7) % 0.7 %
O&R net sales for the six months ended June 30, 2026 decreased slightly, reflecting soft demand, partially offset by favorable pricing and contributions from launches of product innovations. Changes in foreign currency favorably impacted net sales by $4 million, or approximately 1%.
Operating loss for the six months ended June 30, 2026 was $3 million as compared to operating income of $3 million in the prior-year period. The change in operating performance was attributable to an $8 million increase in advertising and promotion spending to support new market entry initiatives and new product launches. Operating income benefited from the recording of a refund of approximately $7 million associated with IEEPA Tariffs expensed in 2025, which was partially offset by inflationary pressures.
Liquidity and Capital Resources
Liquidity
The Company believes the extent of the impact of the rapidly changing retail and consumer landscape, which reflects an increased focus by retailers to rebalance inventory levels, inflationary pressures and uncertainty over the volatility and direction of future demand patterns on the Company's future sales, operating results, cash flows, liquidity and financial condition, will continue to be driven by numerous evolving factors the Company cannot accurately predict and which will vary. The Company has taken actions to further strengthen its financial position and balance sheet, and maintain financial liquidity and flexibility.
The Company believes these actions and its cash generating capability, together with its borrowing capacity and available cash and cash equivalents, provide adequate liquidity, both in the near-term and longer-term, to fund its operations, support its growth platforms, pay down debt and debt maturities as they come due and execute its ongoing business initiatives. The Company regularly assesses its cash requirements and the available sources to fund these needs.
For further information, refer to Risk Factors in Part I - Item 1A and Recent Developments and Liquidity and Capital Resources in Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of the Company's most recent Annual Report on Form 10-K, filed on February 13, 2026.
At June 30, 2026, the Company had cash and cash equivalents of approximately $209 million, of which approximately $144 million was held by the Company's non-U.S. subsidiaries.
Cash, cash equivalents and restricted cash increased (decreased) as follows for the six months ended June 30, 2026 and 2025 (in millions):
2026 2025 Increase (Decrease)
Cash used in operating activities $ (204) $ (271) $ 67
Cash used in investing activities (66) (92) 26
Cash provided by financing activities 283 382 (99)
Exchange rate effect on cash, cash equivalents and restricted cash - 4 (4)
Increase in cash, cash equivalents and restricted cash $ 13 $ 23 $ (10)
The Company has historically generated the majority of its operating cash flow in the third and fourth quarters of the year due to seasonal variations in operating results, the timing of annual performance-based compensation payments, customer program payments, working capital requirements and credit terms provided to customers.
Cash Flows from Operating Activities
The change in net cash used in operating activities reflects higher net income, favorable changes in working capital and lower incentive compensation payment, partially offset by higher restructuring payments.
Cash Flows from Investing Activities
The change in net cash used in investing activities was primarily due to a $34 million decrease in capital expenditures offset by cash used for transactions related to certain hedging instruments.
Cash Flows from Financing Activities
The change in net cash provided by financing activities primarily reflected lower borrowings under the Credit Revolver (as defined hereafter) during the current period. See Footnote 8 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information on the Credit Revolver.
Capital Resources
Credit Revolver and New ABL Credit Facility
Through July 30, 2026 the Company maintained a $1.00 billion senior secured revolving credit facility (the "Credit Revolver") maturing in August 2027. Under the Credit Revolver, the Company could borrow funds on a variety of interest terms. The Credit Revolver agreement (i) required the Company to satisfy financial covenants testing the Company's Collateral Coverage Ratio and Total Net Leverage Ratio (each further defined in the Credit Revolver, as amended), (ii) required the Company and certain of its domestic and foreign subsidiaries (the "Guarantors") to guaranty Company obligations under the Credit Revolver and (iii) required the Company and other Guarantors to grant a lien and security interest in certain assets consisting of eligible accounts receivables, eligible inventory, eligible equipment and eligible intellectual property, and all products and proceeds of the foregoing, subject to certain limitations.
Other than outstanding borrowings under the Credit Revolver, availability under the Credit Revolver was subject to change in accordance with the terms of the agreement, including in response to changes in the Company's pledged collateral value or outstanding letters of credit under the Credit Revolver. At June 30, 2026, there was $969 million of availability under the Credit Revolver, based on the value of the pledged collateral and prior to giving effect to outstanding borrowings and letters of credit.
The Credit Revolver provided for the issuance of up to $150 million of letters of credit, so long as there was sufficient availability for borrowing under the Credit Revolver. At June 30, 2026, the Company had approximately $48 million of outstanding standby letters of credit issued against the Credit Revolver and $470 million of outstanding borrowings under the Credit Revolver, resulting in a net availability of approximately $451 million.
On the Closing Date, the Company, Newell Brands Ireland Services DAC, as a subsidiary borrower, and certain domestic and foreign subsidiary guarantors, entered into a five-year asset-based revolving facility with a syndicate of banks led by JPMorgan Chase Bank, N.A., as administrative agent, pursuant to the ABL Credit Agreement governing the New ABL Credit Facility in the amount of up to $800 million, subject to a borrowing base comprised of, without limitation, qualified cash, accounts receivable, inventory, equipment and intellectual property, and incurred $490 million of borrowings and used $490 million of such borrowings under the New ABL Credit Agreement to repay borrowings under and refinance and replace the Credit Revolver.
The New ABL Credit Facility matures on the earlier of (i) July 30, 2031, as such date may be extended in accordance with the New ABL Credit Agreement, and (ii) solely to the extent that any indebtedness in an aggregate principal amount of $125 million or more ("Material Indebtedness") is outstanding as of the 91st day prior to the then earliest scheduled maturity date of such Material Indebtedness and each day thereafter until and including the scheduled maturity date of such Material Indebtedness, the date that is 91 days prior to the then-stated maturity date of such Material Indebtedness.
In addition to outstanding borrowings under the New ABL Credit Facility, availability under the New ABL Credit Facility is subject to change in accordance with the terms of the New ABL Credit Agreement, including in response to changes in the Company's borrowing base or outstanding letters of credit under the New ABL Credit Facility. At the Closing Date, there was $754 million of availability under the New ABL Credit Facility, based on the borrowing base and prior to giving effect to outstanding borrowings and letters of credit. The New ABL Credit Facility provides for the issuance of up to $150 million of letters of credit, so long as there is sufficient availability for borrowing under the New ABL Credit Facility. As of the Closing Date, the Company had approximately $48 million of outstanding standby letters of
credit issued against the New ABL Credit Facility and $490 million of outstanding borrowings under the New ABL Credit Facility, resulting in a net availability of approximately $216 million.
See Footnotes 8 and 15 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.
The Company was in compliance with all of its debt covenants at June 30, 2026.
Risk Management
From time to time, the Company enters into derivative transactions to hedge its exposures to interest rate, foreign currency rate and commodity price fluctuations. The Company does not enter into derivative transactions for trading purposes.
See Footnote 9 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information on the Company's derivative instruments.
Significant Accounting Policies and Critical Estimates
For further information on significant accounting policies and critical estimates, refer to the Company's most recent Annual Report on Form 10-K, filed on February 13, 2026 and Footnote 1 of the Notes to Unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.
Newell Brands Inc. published this content on July 31, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on July 31, 2026 at 20:13 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]