Newell Brands (Sharpie’s Parent) Slashes Forecast as Tariffs Bite Hard

Tariffs gut Newell's outlook—just another corporate casualty in the trade war circus.

The Bleeding Pen:
Sharpie's parent company joins the growing list of firms getting squeezed by import taxes. No magic marker can whitewash this mess.

Wall Street Reacts:
Analysts shrug—another 'transitory' supply chain hiccup, right? Meanwhile, shareholders reach for the permanent markers to redact their portfolios.

Cynical Footnote:
Another earnings call, another 'macro headwind' excuse. At least the boardroom PowerPoints will have crisp Sharpie-drawn doom charts.

Key Takeaways

• Newell Brands reduced its outlook on anticipated costs of new U.S. tariffs.
• The consumer products maker reduced the range of its operating cash flow for a second straight quarter on the tariff impact.
• Second-quarter profit and sales were in line with analysts' forecasts.

Newell Brands (NWL) shares sank roughly 15% Friday when the consumer products Maker gave weaker-than-anticipated guidance on higher costs from tariffs.

The parent of brands such as Rubbermaid and Sharpie sees full-year tariff expenses of $155 million compared to last year. It expects adjusted earnings per share (EPS) of $0.66 to $0.70, down from the earlier outlook of $0.70 to $0.76. It predicts Core sales to be 2% to 3% lower, versus the earlier forecast of a drop of 1% to 3%.

In addition, the company said because of the impact of tariffs, operating cash FLOW will be $400 million to $450 million. In the first quarter, it was looking for operating cash flow of $400 million to $500 million, which already was a decline from its prior guidance of $450 million and $500 million.

In the second quarter, Newell Brands reported adjusted EPS of $0.24 on revenue that fell 5% year-over-year to $1.94 billion. Both were basically in line with analysts' estimates. 

Sales declined at all three of its business units: Home and Commercial Solutions, Learning and Development, and Outdoor and Recreation. The company blamed the drop on business exits and unfavorable foreign exchange rates.

CEO Chris Peterson said the company faced a "challenging macroeconomic environment."

Shares of Newell Brands have lost half their value this year. 

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