Newell Brands sees results in Q4
Newell Brands Inc. had measurable progress to report in the fourth quarter and full-year 2016 period, with the results of its big Jarden acquisition plainly visible for all to see.
Net sales were up 165.0% to $4.14 billion during the fourth quarter ended Dec. 31. This was largely due to the acquisition, but core sales growth was up 2.5%.
Meanwhile, net income of $165.6 million rose from net income of $13.2 million in the prior year.
Reported diluted earnings per share of $0.34 compared with $0.05 in the prior year. The increase was due to sales growth, earnings from acquisitions, Project Renewal savings and cost synergies related to the Jarden acquisition, which more than offset increased advertising and promotion, negative foreign currency impacts, an increase in amortization of intangibles, higher interest expense, higher share count and a $164 million one-time deferred tax charge related to the Tools divestiture.
“Our fourth quarter results reflect continued strong progress in the company’s transformation,” said Newell Brands CEO Michael Polk. “We delivered over 40% earnings per share growth and nearly $1 billion of operating cash flow, driven by accelerating cost savings from synergies and Project Renewal. Despite significant portfolio and organization change in the quarter, core sales growth was competitive led by very good growth on Writing, Baby, Beverages, Waddington, Fishing, Team Sports and Technical Apparel. We delivered this outcome in the context of challenging mall-based retail conditions driven by accelerating bricks-to-clicks shopper migration during the holidays."
Net sales for the full year period of fiscal 2016 were $13.26 billion, an increase of 124.2% compared with $5.92 billion in the prior year. Core sales increased 3.7%.
Full-year net income was $527.8 million compared with $350.0 million in the prior year.
The company's full year 2017 net sales guidance is in the range of $14.52 billion to $14.72 billion, representing net sales growth of 9.5% to 11.0% compared with prior year.
“This has been one of the most transformative years in our history,” Polk continued. “In the context of unprecedented change, we have delivered very strong full year results with core sales growth of 3.7% and normalized earnings per share growth of nearly 33%. We have made tremendous progress on our strategic initiative to strengthen our portfolio, acquiring businesses with over $10 billion in revenue and divesting or holding for sale businesses with about $1.6 billion in revenue. Our progress on costs has enabled us to improve normalized operating margin by over 100 basis points while simultaneously investing for future growth by strengthening our capabilities in insights, design, innovation and ecommerce. And we have rapidly deleveraged our balance sheet, reducing gross debt by nearly $2.1 billion since the creation of Newell Brands on April 15, 2016. As we head into 2017, we are confident that we will continue to rapidly deleverage while simultaneously putting the building blocks in place to drive the growth acceleration and transformative value creation promised in the Growth Game Plan.”