Newell Brands lifts 2026 guidance 30% after Q2 earnings beat

Newell Brands reported Q2 normalized EPS of 42 cents, beating consensus by 23 cents, and raised its full-year 2026 guidance.

"The favorable estimate revisions trend for Newell Brands translates into a Zacks Rank #2 (Buy), indicating the shares are expected to outperform the market in the near term," Zacks Equity Research said.

Revenue rose 3 percent to $1.99 billion in the quarter ended June 30, topping the $1.98 billion consensus, while core sales grew 2.3 percent. Gross margin expanded to 40.7 percent from 35.4 percent a year earlier, and operating margin improved to 14.2 percent from 8.8 percent. Net income reached $106 million, and normalized EBITDA climbed 45 percent to $406 million. Results included roughly $100 million in pretax tariff recoveries on IEEPA duties expensed in 2025 plus $26 million for tariffs paid in early 2026.

The Atlanta-based consumer goods company now guides to full-year normalized EPS of 73 to 77 cents, up from a prior range of 56 to 60 cents, with operating cash flow around $400 million. It expects net sales growth of 1 to 2 percent and a normalized operating margin of 10.0 to 10.4 percent, up from 8.6 to 9.2 percent. For the third quarter, management projects normalized EPS of 18 to 20 cents on 2 to 3 percent sales growth.

Learning & Development, home to Sharpie and Paper Mate, led segment growth with sales up 5.2 percent to $851 million and a normalized operating margin of 36.9 percent. Home & Commercial Solutions rose 1.2 percent to $903 million, while Outdoor & Recreation gained 2.6 percent to $240 million but saw normalized operating income fall 31 percent. Debt stood at $5.0 billion with cash of $209 million at quarter end, and the company entered a new $800 million asset-based credit facility maturing in 2031.

Shares have climbed 15.6 percent over the past week and are up 38.2 percent year to date, versus an 8.7 percent gain for the S&P 500. The stock opened at $5.14 on Friday, against a 12-month range of $3.07 to $6.64. Analysts hold a consensus rating of Hold with an average price target of $5.38, though Canaccord Genuity raised its target to $9 with a Buy rating in April and Barclays lifted its price objective to $7 with an Overweight rating in July.

The guidance raise suggests management expects the operating turnaround to extend through the back half of the year, supported by tariff refunds and margin recovery. Investors will watch the third-quarter report, due in late October, for confirmation that sales growth and margin expansion hold as cost pressures persist.

This article is for informational purposes only and does not constitute investment advice.