Newell Brands (NWL) Q2 2026 earnings summary

Executive summary

• Achieved year-over-year net and core sales growth for the first time in over four years, with broad-based improvement across business units and brands, driven by innovation, increased advertising, and enhanced go-to-market capabilities.

• Q2 2026 net sales increased 3% to $2.0 billion, with strong U.S. performance and product innovation offsetting soft international demand and inflationary pressures.

• Margins and EPS were boosted by significant IEEPA tariff recoveries, with over $100 million pretax benefit recorded in Q2 and additional recoveries from prior periods.

• Second quarter results exceeded expectations across all key financial metrics, prompting a raised full-year outlook for sales, margins, EPS, and cash flow.

• Innovation pipeline remains robust, with over 25 Tier 1 or Tier 2 launches expected for the year.

Financial highlights

• Net sales rose 3% year-over-year to $2.0 billion in Q2 2026; core sales up 2.3%.

• Gross margin improved to 40.7% (normalized 40.8%), up from 35.4% year-over-year, primarily due to tariff refunds.

• Operating margin increased to 14.2% (normalized 16.2%), up from 8.8% (normalized 10.7%).

• Net income for Q2 2026 was $106 million (up from $46 million); normalized net income was $180 million (up from $101 million).

• Diluted EPS was $0.25 (vs. $0.11); normalized diluted EPS was $0.42 (vs. $0.24).

• Trailing 12-month normalized EBITDA was ~$1 billion; net leverage ratio improved to 4.8x from 5.5x a year ago.

• Operating cash flow outflow improved to -$204 million for the first half, up $67 million year-over-year.

Outlook and guidance

• Full-year 2026 outlook raised: net sales growth 1–2%, core sales flat to 1%, normalized operating margin 10.0–10.4%, normalized EPS $0.73–$0.77, operating cash flow around $400 million.

• Q3 2026 guidance: net and core sales growth of 2–3%, normalized operating margin 9.5–10.2%, normalized EPS $0.18–$0.20.

• Plan to finish year with net leverage comfortably below 4.5x.

• Management expects continued macroeconomic and geopolitical volatility, with persistent inflationary pressures and uncertain global demand.

• Mitigation actions include pricing optimization, productivity initiatives, and strategic manufacturing relocations.