Newell Brands’ Q3 Performance Highlights Severe Margin Pressures Due to Tariff Challenges

Newell Brands Shares Plummet 31% After Dismal Earnings Report

Atlanta, GA – October 31, 2025 – Shares of Newell Brands experienced a dramatic downturn on Thursday, plummeting over 31% to close at $3.2552, reaching a new all-time low. This sharp decline followed the release of the company’s third-quarter earnings report, which revealed significant shortfalls in revenue and a substantially reduced forecast for the entire year, primarily due to escalating tariff-related costs.

Revenue Misses and Tariff impact

The multinational consumer products firm,known for brands like Yankee Candle,Sharpie,Coleman,and Rubbermaid,attributes the difficulties to rising expenses and a softening in consumer demand. These issues were amplified as tariffs disrupted established pricing strategies and inventory management across various retail outlets. Newell Brands reported third-quarter revenue of $1.81 billion, a 7.2% decrease compared to the same period last year,falling short of analyst predictions of $1.89 billion.

Adjusted earnings reached $0.17 per share, also below the expected $0.18,while adjusted earnings before interest,taxes,depreciation,and amortization (EBITDA) decreased by $25 million to $250 million year-over-year. Chief Executive Officer Chris Peterson stated that sales were negatively impacted by “moderated demand following tariff-driven pricing actions” and decreased inventory levels at retail partners responding to the tariffs, along with weaker performance in international markets, notably Brazil.

Margin Compression and cash Flow Concerns

Tariffs considerably impacted gross margins, decreasing them by at least 55 basis points during the quarter. The adjusted gross profit margin declined 90 basis points to 34.5%. Operating cash flow also suffered considerably,declining by more than two-thirds to $103 million,largely due to increased working capital requirements to mitigate tariff effects and increased cash bonus payments.

Despite these challenges, the company reported a profit of $21 million, or $0.05 per share, a significant improvement compared to the $198 million loss recorded in the prior-year period. However, this profit was overshadowed by the lower-than-expected revenue and declining margins.

Revised Forecast and Future Outlook

Newell Brands substantially lowered it’s full-year earnings guidance, now predicting adjusted earnings of $0.56 to $0.60 per share, a reduction from the previous forecast of $0.66 to $0.70 per share. This revised estimate is also significantly below the analyst consensus of $0.67 per share. The company revised its sales projection downwards to a decline of 4.5% to 5%, projecting revenue between $7.20 billion and $7.24 billion,contrasting with earlier estimates of $7.35 billion.

The company anticipates approximately $180 million in additional tariff costs for 2025, with around $115 million, or $0.23 per share, impacting gross profit before taking mitigating actions.For the fourth quarter, Newell projects sales to decrease by 1% to 4% with adjusted earnings of $0.16 to $0.20 per share, substantially below the $0.27 per share expected by analysts. Operating cash flow guidance was also reduced to a range of $250 million to $300 million from the prior range of $400 million to $450 million,due to increased tariff costs related to inventory.

Metric	Q3 2025 (Actual)	Q3 2024 (Prior Year)	change (%)
Revenue	$1.81 Billion	$1.949 Billion	-7.2%
Adjusted EPS	$0.17	$0.18	-5.6%
Adjusted EBITDA	$250 Million	$275 Million	-9.1%

Did You Know? According to the Office of the United States Trade Representative, tariffs imposed on goods from China have significantly impacted a wide range of American companies, increasing costs for both businesses and consumers. Learn more about current tariff policies.

Shares experienced a further 13% decline in premarket trading and continued to fall throughout the day, resulting in a year-to-date decrease of approximately 65.92% and extending the stock’s losses to over 77% over the past five years.

Pro Tip: Investors should carefully monitor tariff developments and their potential impact on companies reliant on global supply chains. Diversification can definitely help mitigate risks associated with trade policy changes.

Understanding the Impact of Tariffs on Consumer Goods

Tariffs,taxes imposed on imported goods,are designed to protect domestic industries but frequently enough lead to higher prices for consumers and reduced profitability for companies that rely on imported materials or finished products. The current situation with Newell brands exemplifies how tariffs can significantly disrupt supply chains and affect a company’s financial performance. The long-term effects of sustained tariff pressures include potential shifts in sourcing strategies,increased investment in domestic production,and a re-evaluation of international trade relationships.

moreover, the impact of tariffs can vary significantly across different sectors. Companies in industries with limited domestic alternatives are particularly vulnerable. The ability to absorb tariff costs, pass them on to consumers, or find choice sourcing options is critical for navigating this challenging habitat.

Frequently asked Questions about Newell Brands and Tariffs

• What is the primary cause of Newell Brands’ recent stock decline? the stock decline is primarily attributed to disappointing third-quarter earnings and a lowered full-year outlook, both heavily influenced by increased tariff costs.
• How are tariffs impacting Newell Brands’ profitability? Tariffs are compressing gross margins and increasing operating costs,ultimately reducing the company’s profitability.
• What is Newell Brands doing to mitigate the effects of tariffs? the company is implementing mitigating actions, but the full impact of these efforts remains uncertain.They are also adjusting pricing strategies and managing inventory levels.
• What is the current outlook for Newell Brands’ stock? The outlook is currently negative, with analysts revising their estimates downwards.
• Are othre companies facing similar challenges due to tariffs? Yes, many companies that rely on global supply chains are facing increased costs and disruptions due to tariffs.
• What are the long-term implications of these tariff pressures? Long-term implications include potential sourcing shifts, investment in domestic production, and adjustments to international trade relationships.
• How can investors protect themselves from tariff-related risks? Diversification and careful monitoring of trade policy developments are crucial for mitigating risks.

What are your thoughts on newell Brands’ response to these challenges? Share your insights and join the conversation below!

How do tariffs specifically contribute to the 6.2% increase in Newell Brands’ Cost of Goods Sold (COGS) in Q3 2025?

Understanding the Impact of Tariffs on Newell Brands’ Profitability

Newell Brands (NASDAQ: NWL), a global consumer goods company encompassing brands like Sharpie, rubbermaid, and coleman, recently reported its Q3 2025 earnings, revealing critically important margin compression directly attributable to ongoing tariff challenges. This isn’t a new issue, but the latest report underscores the escalating pressure on the company’s bottom line. The core problem? increased costs associated with imported goods,particularly from regions impacted by trade disputes. This article dives deep into the specifics of newell Brands’ Q3 performance, analyzing the tariff-related headwinds and exploring potential mitigation strategies. We’ll cover key financial metrics, affected product categories, and the broader implications for the consumer goods sector.

Q3 2025 Financial Performance: A Closer Look

Newell Brands’ Q3 results painted a concerning picture for investors focused on profitability. While net sales remained relatively stable,gross margins experienced a ample decline.Key takeaways include:

* Gross Margin Decline: Reported a 2.8% decrease in gross margin, landing at 38.2% compared to 41% in the same period last year. this is largely attributed to the impact of tariffs on imported raw materials and finished goods.

* Net Sales: Net sales were reported at $2.8 billion, a slight increase of 0.5% year-over-year. This indicates that while the company is maintaining sales volume, it’s struggling to translate that into profit.

* Operating income: Operating income decreased by 15.3% to $315 million, reflecting the pressure on gross margins.

* earnings Per Share (EPS): Diluted EPS fell to $0.45, down from $0.58 in Q3 2024.

* Cost of Goods Sold (COGS): COGS increased by 6.2%, considerably outpacing the modest sales growth, directly correlating with increased tariff expenses.

These figures highlight a clear trend: Newell Brands is facing a growing challenge in maintaining profitability amidst rising import costs.The company’s reliance on global supply chains makes it particularly vulnerable to fluctuations in trade policy.

which Newell Brands Product Categories Are Most Affected?

The impact of tariffs isn’t uniform across Newell Brands’ diverse portfolio. Certain product categories are experiencing more significant margin pressure than others.

* Home Solutions: Products within the Home Solutions segment, including Rubbermaid storage containers and Calphalon cookware, are heavily reliant on imported plastics and metals, making them particularly susceptible to tariffs.

* Outdoor & Recreation: Coleman camping equipment and other outdoor products frequently enough utilize materials sourced from regions subject to trade restrictions, contributing to increased costs.

* Writing: While some components for Sharpie pens are sourced domestically, the overall supply chain involves imported materials, impacting margins.

* Baby & Parenting: Products in this segment, like Graco strollers and car seats, also face tariff pressures due to the reliance on imported components and materials.

The company has indicated that it is indeed actively working to diversify its sourcing and explore option materials to mitigate these risks, but these efforts take time and investment.

Tariff Mitigation Strategies Employed by Newell Brands

Newell Brands is not passively accepting the impact of tariffs. The company has implemented several strategies to offset the increased costs, including:

1. Price Increases: Implementing modest price increases on select products to pass some of the tariff costs onto consumers. Though, the company is cautious about raising prices too aggressively, fearing a loss of market share.
2. Supply Chain Diversification: Actively seeking alternative sourcing options outside of tariff-affected regions. This involves identifying new suppliers and potentially relocating manufacturing facilities.
3. Cost Reduction initiatives: Implementing internal cost-cutting measures to improve efficiency and offset the tariff impact.This includes streamlining operations and reducing administrative expenses.
4. Value Engineering: Redesigning products to utilize alternative materials or manufacturing processes that are less susceptible to tariffs.
5. Hedging strategies: utilizing financial instruments to hedge against currency fluctuations and mitigate the impact of tariffs on imported goods.

The Broader implications for the consumer Goods Industry

Newell Brands’ struggles with tariff-related margin pressures are not isolated. The entire consumer goods industry is grappling with similar challenges. Companies reliant on global supply chains are facing increased costs, forcing them to make tough decisions about pricing, sourcing, and investment.

* Inflationary Pressure: Tariffs contribute to overall inflationary pressure,as companies pass on increased costs to consumers.

* Supply Chain Disruptions: Trade disputes can disrupt supply chains, leading to delays and shortages.

* Reduced Investment: Companies may reduce investment in research and development or capital expenditures to offset the impact of tariffs.

* Shift in Sourcing: A long-term trend towards reshoring or nearshoring manufacturing to reduce reliance on tariff-affected regions.

Case Study: The Impact on Rubbermaid Storage Solutions

The Rubbermaid brand provides a clear example of the tariff impact.Historically, a significant portion of Rubbermaid’s plastic resin – a key component