Newell Brands Steps Up Online Efforts as Mall Traffic Slumpsby
Calphalon, Sharpie maker’s sales surge on acquisitions
Attention on e-commerce as consumers shun malls for online
Newell Brands Inc., the consumer-products giant that bought Jarden Corp. for $15 billion in April, is looking to expand its web presence as consumers continue to shy away from mall shopping.
The move comes as Newell, whose brands include Calphalon, Sharpie and Yankee Candle, saw the shift in habits weigh on fourth-quarter results. While sales more than doubled to $4.14 billion in the three months ended Dec. 31, the total fell short of the $4.27 billion analysts estimated in a Bloomberg survey. The company’s shares slipped 3 percent as of 8 a.m. in New York premarket trading.
Newell’s been through a “massive amount” of change since the Jarden acquisition and has its “hands full” as it moves to close multiple deals in the next three moths, Chief Executive Officer Michael Polk told Bloomberg News in a phone interview.
“It feels like we have come through the transition period and that we are now in the startup phase,” Polk said.
The investments in online can’t come soon enough, as store performance for brands such as Yankee Candle and Calphalon fell short the Hoboken, New Jersey, company’s forecasts as fewer shoppers than predicted went to the mall during the holidays.
Newell also cut the lower end of its 2017 forecast for core sales growth to 2.5 percent from 3 percent, while leaving the top end unchanged at 4 percent. The 2016 rate was 3.7 percent. Polk said the cut came on the expectation that mall-based retailers will continue to struggle as consumers accelerate the migration to the web.
The company forecast full-year sales of $14.52 billion to $14.72 billion, less than analysts’ estimate for $15.13 billion. Polk expects sales growth to pick up later in 2017 and into 2018.
Fourth-quarter adjusted profit matched Wall Street expectations of $0.80 a share, and the company boosted its 2017 adjusted per-share profit forecast range by 10 cents to between $2.95 and $3.15.
Newell shares have surged 28 percent in the past year, outperforming the broader consumer-discretionary group in the S&P 500 Index. The stock is up 5 percent so far in 2017. Signs of faster wage growth and growing confidence among American consumers has sent retail shares higher since Donald Trump’s surprise election in November.
Polk says the new administration’s promised pro-growth policies likely won’t have any material impact on Newell’s business in 2017, and that it’s too soon to comment on potential reforms to trade and tax regulations.
The “devil is in the detail,” he said. “Winning companies adapt to their environment and take advantages of changes like this to serve their agenda.” On any given topic of reform, there may be “a huge opportunity to consolidate market share.”
Polk was listed among executives assisting Trump on an initiative to create more manufacturing jobs in the U.S. according to White House statement.