Newell Brands (NASDAQ:NWL) executives told attendees at the Consumer Analyst Group of New York (CAGNY) conference that the company’s multi-year “capability-based” turnaround remains on track, with management expecting performance trends to accelerate in 2026 as innovation, distribution, and productivity initiatives scale.
President and CEO Chris Peterson said Newell is a portfolio of “leading consumer brands designed to delight consumers,” with “a little bit over $7 billion in net sales” and “close to $900 million in EBITDA.” Peterson added that the company’s top 25 brands represent about 90% of sales, and 10 countries account for roughly 90% of sales. Newell organizes its portfolio into three segments: home and commercial solutions, learning and development, and outdoor and recreation. About 60% of business is in the U.S., with about 40% international, according to Peterson.
Strategy and capability rebuild
On “how to win,” Peterson said the plan centers on rebuilding consumer insight, innovation, brand communications, and go-to-market execution, while continuing to advance a scaled global supply chain and a “high-performance organization.” He said 2024 showed meaningful progress, including improved core sales growth, higher gross margin, improved EBITDA, and balance sheet deleveraging.
Tariffs disrupted 2025 results; company adjusted with sourcing, productivity, and pricing
Management said 2025 results were materially affected by trade and tariffs. Peterson stated Newell paid $174 million of incremental tariff costs in 2025 that were not in the company’s plan at the beginning of the year, resulting in a P&L headwind of $114 million, or $0.23 per share. He said the “substantial majority” of those tariffs were under the IEEPA tariff regime, which he noted had just been ruled invalid by the Supreme Court, though he emphasized it was too early to determine implications, including whether tariffs could be reimposed under other authority or whether refunds would be available.
To address the headwind, Peterson said Newell adjusted sourcing by shifting more production to U.S. plants and moving more products out of China to other countries; intensified supply chain and overhead productivity to generate savings; and implemented three pricing rounds on April 1, May 1, and July 28. He said Newell’s gross margin rose 10 basis points in 2025 versus 2024 despite the tariffs, operating margin increased 20 basis points, and the company invested an additional 50 basis points in advertising and promotion (A&P). Peterson also said the company’s net leverage ratio ended 2025 at about 5x, roughly where it started the year, but he acknowledged pricing actions pressured top-line sales as competitors delayed their own pricing in some categories.
AI “Quantum Leap” program and innovation pipeline
Peterson said Newell launched an enterprise AI initiative called Quantum Leap, with early executive sponsorship and a shift in mid-2025 from isolated use cases to a broader “how work gets done” workflow model. He said Newell is using generative AI, machine learning, and agentic AI for workflow management. Peterson reported that more than 2,000 employees use AI daily and that the company has over 100 active use cases, supported by an AI steering team and 33 functional “navigators.”
He highlighted AI’s role in innovation, including ideation, design, prototyping, consumer understanding, and testing, which he said has reduced cycle times from concept to launch. In marketing activation, Peterson said AI-enabled digital content creation increased 500% in 2025 versus 2024 with no additional investment.
Peterson also described an expanded innovation slate heading into 2026, calling it the strongest since the Jarden acquisition. He said Newell moved from launching one major “Tier One or Tier Two” innovation in 2023 to 18 in 2025 and 25 launching in 2026. Examples discussed included:
- Writing: Extensions to Sharpie S-Gel (including a “style icon” set), enhancements to Expo ink and an expansion into wet-erase, and new metallic colors and tip sizes for Sharpie Creative Markers.
- Baby: The Easy Turn 360 car seat, which Peterson said was the No. 1 innovation in U.S. baby gear last year and gained 860 basis points of share in the turning car seat market; and a SnugRide Turn & Slide product launching into the infant car seat segment.
- Kitchen: Expansion in performance blending with an “Extreme Mix” blender launching across Latin America and into the U.S.
- Home fragrance: A Yankee Candle relaunch in the U.S. that Peterson said returned the business to 6% core sales growth in Q4, with plans to relaunch across Europe in 2026, alongside a premium line and relaunches of WoodWick and Chesapeake Bay.
- Outdoor and recreation: A relaunch of Contigo, a Bubba launch targeted to Gen Z females, and a patent-pending “world’s first collapsible cooler” from Coleman.
Peterson said improved go-to-market execution, stronger innovation, and tariff-advantaged manufacturing contributed to winning more line reviews in 2025 that reset in 2026. He added Newell forecasts net total distribution points to be up in 2026 “for the first time” since the Jarden acquisition, supported by retailer commitments for increased shelf presence.
Simplification, ERP consolidation, manufacturing footprint, and financial targets
CFO Mark Erceg said Newell’s “radical simplification” efforts support both execution and AI enablement. He said the company reduced active SKUs by over 80%, rationalized its brand portfolio from 80 to “slightly more than 50,” and consolidated 23 standalone supply chains into an integrated operating company, while eliminating thousands of subscale suppliers and distributors, hundreds of legal entities, and dozens of office locations. Erceg said these steps contributed to a 96% global fill rate, which improved excess and obsolete inventory and reduced customer penalties.
On IT, Erceg described a multi-year ERP consolidation and said the effort will end in the fall, when about 95% of global sales are expected to be supported by a single instance of SAP, up from 35% historically. He said the simplified IT core improves data governance and quality, enabling faster AI-augmented cycle times.
Erceg said normalized overhead as a percentage of sales declined in Q3 2025 for the first time in three years and again in Q4 2025, and management expects overhead as a percentage of sales to continue to fall. He also outlined Newell’s supply chain footprint, citing about $2 billion of investment in U.S. manufacturing since the 2017 Tax Cuts and Jobs Act, including automation. Newell operates 41 plants globally and produces about 57% of what it sells, with the rest sourced. Erceg said China-sourced product in the U.S. now represents less than 10% of total cost of goods sold and is expected to decline further.
He said Newell’s “fuel productivity program” has generated annual savings in excess of 3% of COGS, contributing to higher gross margin since 2023. Erceg cited automation benefits at the company’s Maryville, Tennessee writing plant, where he said output improved from six workers producing 150 Sharpie markers per minute to one operator producing 500 per minute.
Looking to 2026, Erceg said tariffs would continue to pressure gross margin until fully annualized and suggested gross margin should be “about flat” for modeling purposes, while A&P is expected to rise in dollars and as a percentage of sales. He said normalized overhead is expected to decrease by about 80 basis points this year. Erceg pointed to a 8.6% to 9.2% guidance range for normalized operating margin and said the midpoint implies an expansion of about 50 basis points to roughly 8.9%.
Erceg also discussed longer-term targets, citing a “clear line of sight” to normalized gross margin of 37% to 38%, A&P of 6% to 7%, normalized overhead of 17% to 18%, and normalized operating margin of 12% to 15%. On leverage, he said the company reduced leverage from nearly 6.5x to about 5x by the end of 2024, but held near 5x in 2025 due to tariff cash impacts. For 2026, he said operating cash flow is expected to rise roughly 40% versus 2025, supported by drivers including mid-single-digit normalized EBITDA growth, lower cash taxes, lower cash bonus payout, and a lower cash conversion cycle. He said the increase, together with reduced capital expenditures as major projects wind down, is expected to fund the dividend, support “a modest” amount of debt paydown, and reduce year-end leverage by about half a turn.
Erceg said Newell’s long-term “evergreen” targets remain unchanged: low single-digit core sales growth, 50 basis points of operating margin improvement annually, and about 90% free cash flow productivity. He added the company continues to fund internal growth opportunities while delevering and paying a $0.07 quarterly dividend.
About Newell Brands (NASDAQ:NWL)
Newell Brands Inc, trading on NASDAQ under the ticker NWL, is a global consumer goods company known for its diverse portfolio of household, commercial, and specialty products. Formed through the merger of Newell Rubbermaid and Jarden Corporation in 2016, the company traces its roots back to Newell Manufacturing, which was founded in 1903. Headquartered in Atlanta, Georgia, Newell Brands has built a reputation for widely recognized brands spanning multiple consumer categories.
The company’s business activities are organized across several segments, including writing and creative expression, home solutions, commercial products, and outdoor recreation.
