Oct 30, 2026 earnings call — Sales growth driven by innovation and cost actions
Net sales rose 3.7% to approximately $1.9 billion with core sales up 3.3%, driven by expanded distribution and new product launches.
Revenue $1.9B (est $1.9B) · EPS $0.20 (est $0.20)
Key quotes
"With 2 consecutive quarters of top line growth, it is becoming increasingly clear that investments in consumer understanding, innovation, brand building, marketing, and go to market capabilities are expanding distribution and driving growth."
"That means we are being forced to contend with a total in year inflationary headwind of $220 million, which equates to approximately 4.6% of our total cost of goods sold."
"We now expect full year operating cash flow of approximately $150 million"
Analyst Q&A 7
Q3 vs Q4 sales and baby pricing
Q (Olivia Tong Cheang · Raymond James): Analyst asked why Q4 core sales moderated versus Q3, how much Q3 growth was volume vs pricing, and whether baby price actions were held because of possible tariff relief or consumer sensitivity.
A: Management said Q3 core sales growth was driven mostly by volume, pricing was effectively close to 0, and they are waiting for details on the announced tariff reduction for baby gear before taking pricing there.
"So let me start with the vast majority of the core sales growth in Q3 is being driven by volume." — Christopher H. Peterson (CEO)
Inflation impact and $150m assumption
Q (Peter Grom · UBS): Analyst asked how management thinks about covering the incremental $100 million of inflation through pricing and productivity, and what underpins the $150 million inflation assumption for next year.
A: Management said they feel good about their approach. They noted inflation was about $90 million in 2025, $220 million in 2026, and they are planning for $150 million next year while using productivity actions to expand margins.
"In 2025, inflation was about $90 million As Chris indicated, this year in 2026 it is been $220 million." — Mark J. Erceg (CFO)
Quarter vs expectations by segment
Q (Peter Grom · UBS): Analyst asked for a report card on how Q3 played out across segments versus expectations and any notable callouts into Q4 and 2027.
A: Management reviewed segments: writing grew stronger than expected driven by back-to-school and replenishment; baby was roughly flat driven by shipment timing though year-to-date still up; home and commercial was a standout at 6%; outdoor and recreation slipped due to shipment timing but expected to bounce back in Q4.
"When you put all of that together, was that we came in and, you know, above our 4 forecast, above plan, and above the high end of our guidance range." — Christopher H. Peterson (CEO)
Leverage, cash flow, and factoring
Q (Lauren Lieberman · Barclays): Analyst asked about updated year-end leverage target, operating cash flow, and the impact of reduced reliance on factoring into 2027.
A: Management said they target to be below 4.5x leverage at year-end and feel good about cash delivery. They explained the company expects about $400 million operating cash flow, lower CapEx under $200 million, less short-term debt, and that reduced factoring capacity is offset by refinancing with no restrictions.
"So we are still comfortably targeting to be, you know, below 4.5x." — Mark J. Erceg (CFO)
Pricing strategy and durability
Q (Stephen Robert Powers · Deutsche Bank): Analyst asked how management decides where to place pricing next year: by segment, cost pressure, or behind innovation, and whether pricing is durable if costs ease.
A: Management said pricing will be more strategic and tailored by business and geography: options include list increases, mix, promotion changes, or new-product pricing. They expect low- to mid-single-digit pricing on average, with some categories mid-single digits, and believe pricing can be durable while they also capture fuel productivity savings.
"So first of all, I would say that you know, when I. When we talk about pricing, we are trying to be much more strategic." — Christopher H. Peterson (CEO)
Consumer price sensitivity learnings
Q (Andrea Teixeira · JPMorgan): Analyst asked about learnings on consumer affordability and sensitivity when raising prices ahead of competitors, and whether they use price point strategies or RGM to protect volume.
A: Management said past large price increases in 2023 led to negative volume until competitors matched; this time increases will be much more modest, selective, and timed with competitor or private-label moves, often using price-pack architecture to limit consumer notice.
"As we go into next year. I do not think there is any business or any category where we are talking about price increases to anywhere where we expect the magnitude to be close to what happened, in 2023 or 2024." — Christopher H. Peterson (CEO)
Holiday outlook and consumer health
Q (Filippo Falorni · Citi): Analyst asked about the holiday season outlook and whether lower-income consumers under pressure will affect demand in their categories.
A: Management said category growth in Q3 was roughly flat, with the US positive and Europe negative. They noted low-income US consumers are pulling back less than last year, high-income consumers still spend more, and they expect holiday spending to be up versus year ago and that Newell is well positioned with distribution gains and new product innovation.
"When we look at that consumer picture, the biggest difference year over year in terms of why the category growth is improving is the low income consumers declining less than they were a year ago." — Christopher H. Peterson (CEO)