Newell at Barclays Conference: Strategic Transformation and Optimism

On Wednesday, 03 September 2025, Newell Brands (NYSE:NWL) presented at the Barclays 18th Annual Global Consumer Staples Conference 2025, highlighting its strategic transformation efforts amidst past challenges. The company discussed its focus on innovation, efficiency, and mitigating tariff impacts while expressing cautious optimism about future growth driven by potential interest rate reductions and GDP growth.

Key Takeaways

• Newell is implementing a new operating model to enhance core capabilities, focusing on innovation and efficiency.
• The company has significantly improved gross margins and reduced net leverage, aiming for continued top-line growth.
• Tariff mitigation strategies include reducing China-U.S. sourcing and leveraging U.S. manufacturing advantages.
• Newell is optimistic about future growth prospects despite current economic pressures on consumer spending.

Financial Results

• Gross Margin: Increased by almost 600 basis points over two years, with a target of 37% to 38%.
• Tariff Impact: Anticipates a $155 million cash impact from tariffs, with partial offsets through cost management.
• Capital Allocation: Redeemed April 2026 bond, enhancing financial flexibility.
• Leverage and Operating Margin: Current leverage at 5.5x, aiming for a normalized operating margin of 12% to 15%, expecting to close the year near 9%.
• Category Growth Rate: Projected to be around -2% this year, with savings from productivity efforts running in the 4% to 5% range.

Operational Updates

• Innovation Pipeline: Reset and expanded, increasing tier one and tier two innovations significantly.
• Distribution: Improved system turning positive, expected to shift from a revenue headwind to a tailwind.
• Tariff Mitigation: Reduced China-U.S. sourcing to less than 10%, created free trade zones, and secured $35 million in incremental sales from tariff-advantaged categories.
• Manufacturing and AI: 55% of U.S. business manufactured in-house, with AI applications increasing digital asset creation by 500% at the same cost.

Future Outlook

• Category Growth: Optimistic about improvement due to potential interest rate cuts and GDP growth.
• Tariffs and Core Sales: Expects distribution wins to exceed current $35 million incrementally; Q4 guidance indicates flat core sales with stronger innovation and tariff advantage selling.
• Margins: Anticipates gross margin expansion in Q4 after potential Q3 risks due to tariff dynamics.

Q&A Highlights

• Divestitures and Acquisitions: No current plans for divestitures; medium-term potential for tuck-in acquisitions.
• Outdoor and Rec: Expected core sales growth next year with new innovations launching in January.

Readers are encouraged to refer to the full transcript for a detailed account of Newell’s presentation and strategy.

Full transcript - Barclays 18th Annual Global Consumer Staples Conference 2025:

Unidentified speaker: The audience who may have known an earlier renewal, what would you say has changed?

Chris, Newell: Almost everything is what I would say.

Unidentified speaker: Of course.

Chris, Newell: When we got started two point five years ago on this journey, we started to your point with the capability assessment, assessing the 11 core capabilities that are required to win in consumer products and really trying to do a database deep dive of where did we stand from a capability standpoint versus competition. At that point in time, on about half of those capabilities, we were red, meaning we were worst in class, generally on the things that drive top line growth. We were yellow and green on a lot of the supply chain and back office functions. That led to a new strategy, which we put in place in June 2023 with a very clear set of where to play and how to win choices. That then led to the kickoff of a capability improvement project list as well as a new operating model.

And that new operating model was very much focused on establishing global segments that ran the P and L for the brands, establishing brand management and then ruthlessly scaling our go to market supply chain and back office as a one dual organization structure. Underpinning all of that, we’ve upgraded talent, changed the company’s culture to a high performing innovative and inclusive culture and established a new set of values across the company. So it’s been a pretty soup to nuts reassessment and rebuild of the company. And what we’re excited about as we sit here today is we’ve seen the results of that. Our rate of core sales growth has improved significantly today versus where we were two point five years ago.

Although we’re still negative this year, we are less negative this year than we have been in the last couple and we are on our way to get back to core sales growth. We’ve taken our gross margin up almost 600 basis points in two years, which is a remarkable achievement. We’ve reduced our net leverage ratio. We’ve improved our balance sheet. We’ve driven strong cash flow.

So we think we’re on the right track. Although we’re not satisfied with where we are, there’s still more work ahead of us to go.

Unidentified speaker: Okay. Great. I want to dig into a lot of that further as we go. But maybe first, we can talk about your outlook for category growth this year. Earlier in the year, you’ve been talking about a 1% to 2% decline for categories.

And then in August, it results you lowered that to low single digits. So subtle change, but a change. So what drove that change in expectations? Any change over the past month? And you also, in that conversation, discussed confidence in improving category growth in ’26.

Maybe you can just kind of unpack some of that

Chris, Newell: for us. Yes, sure. So exactly right. In the August earnings call, we said effectively we’re going to be down about we expect our category growth rate in the categories we compete to be down, call it, about 2% this year. That’s about what we saw in the first half of the year.

One of the things that’s important to note is that we were pretty close to that category growth number in the first half of the year from a core sales growth standpoint. And so what that means is that our market share is improving as we’re bringing the frontline capabilities on. As we looked at the outlook for the balance of the year, we didn’t see a catalyst for the category growth rate in the back half of the year to be better than the first half of the year. And so we reset our guidance to include the impact of tariffs, but also to include assumption that the minus 2% was going to sort of sustain throughout this year. In the last month, we haven’t really seen anything from a consumer standpoint that would change that dynamic or change that outlook.

That being said, what we are seeing from a consumer standpoint is that the lower income consumer remains under pressure. The middle income consumer also is increasingly under pressure. And what that’s resulting in is consumers looking for more value. The good news is our portfolio, we’ve been working on developing products and innovation that deliver strong value behind our leading brands. And we’re seeing that on some of our businesses, which I’m sure we’ll get into.

The high income consumer remains very strong. Equity values have gone up. Home values have gone up. And so we see a very different dynamic for high income consumers versus middle and lower income consumers. As we go to next year, I think there’s reasons for optimism that category growth can improve next year in discretionary product categories.

I’m not an economist, but the uncertainty from a consumer standpoint that we’ve endured this year is seemingly lessening as we go forward. I think we’re headed to an environment where interest rates are likely to come down as we go into next year. That helps directly on household formation and which directly impacts some of our categories. And I think some of the most recent statistics on GDP growth above 3% are encouraging. So we’re not guiding yet for next year, but I’m cautiously optimistic when I look at the macro environment that the category growth rate can improve next year versus this year.

Unidentified speaker: Okay. Great. Before we go further, I wanted to just set the scene on tariffs. So let’s just start with what you’re facing, where are they the most pronounced and how you’re mitigating and or benefiting from this new environment?

Chris, Newell: Sounds good. So tariffs has been a dynamic environment to say the least with the number of changes. What I would say on tariffs is a couple of things. First, we’ve created a trade expertise center across Newell, which we did before tariffs got started, but that we think is a competitive advantage. So we have an organization that in real time gets tariff announcements from all governments, from all countries around the world in which we do business, can run it through our system and can give us a financial impact usually within a couple of days.

So we have very strong visibility to the impact on renewal from tariffs. We also have created a lot of flexibility in our supply chain. Recall that several years ago thirty five percent of our business was sourced in China headed to The U. S. At the beginning of this year that we had reduced that number proactively down to 15% and by the end of this year we’ll be less than 10% China to The U.

S. Dependent on our business. We’re still very much on track for that. We’ve also created free trade zones in The U. S, which give us ability to navigate this environment.

When the tariffs came in to the current state of play, we’ve guided that we expect the cash impact on tariffs renewal this year to be about $155,000,000 incrementally. The P and L impact of that is about $0.21 a share. We have done a couple of things. One, we’ve gotten more aggressive on overhead cost management and we’ve gotten more aggressive on fuel productivity programs. We’ve also to partially offset the impact of tariffs, we’ve also taken three rounds of pricing.

The first round we put in place effectively around May 1, then June 1 and then the last round was August 1. So we have at this point fully priced for tariffs. The retail pricing has not fully reflected our pricing yet, but our pricing is now fully in place. The other thing I would point out is about 55% of our U. S.

Business we manufacture ourselves. We have 15 U. S. Manufacturing plants and we have two plants Mexico that are USMCA compliant that are not subject to tariffs. And on those categories, we’re advantaged because we’re not facing really any tariff exposure on that part of the business.

Okay.

Unidentified speaker: Categories where you’re advantaged, maybe mention a couple of them. And then also, are there any categories you’re actually disadvantaged as a result of tariffs? And if so, how are you going to address those?

Chris, Newell: Yes. So I would say we’re advantaged in significantly more categories that represent a greater percent of the business than where we’re disadvantaged. There’s 19 categories that we are advantaged. And one of the things we’ve done since tariffs have gone on is we’ve gone on a proactive selling pitch to retailers to effectively delist the competitive set that’s coming from overseas that’s going to have tariff exposure and change out to our brands. On the last earnings call, we said we expected about $30,000,000 of wins already in the back half of this year from that.

We’ve actually secured more wins at this point, so we’re up to $35,000,000 So we’ve gotten another 5,000,000 since we last reported in additional wins this year. And that number for what it’s worth I think is going to be bigger as we go into next year, because we’ll have a full year impact of that. So we’re on our front foot pitching where we have cost advantaged categories. And those categories would include things like eight of our top 10 brands are made in The U. S.

It would include things like the Writing business, which is made in Maryville, Tennessee the food storage business behind the Rubbermaid brand. We have a big Rubbermaid commercial products business that’s made in Virginia. We’ve got part of our outdoor and rec business that’s made in Kansas to name a few and several others. The categories there’s then a set of categories where we’re kind of neutral. The biggest category where we’re subject to tariffs that were kind of neutral with the industry is the baby category with Graco.

On that category, it’s interesting because that’s where we’ve taken the most aggressive pricing. And about half of the pricing that we’ve taken has been reflected at this point by retailers. The interesting thing on that business is we’re gaining market share right now despite the pricing. And we’re gaining significant market share behind great innovation. We’ve launched the EZ Turn convertible car seat.

We’ve launched the SmartSense Bassinet and Swing that is driving market share growth. The other thing we’re seeing is consumers are trading down from the super premium segment to Graco. So we’re seeing Nuna, UPPAbaby and Maxi Cosi, which are at the super premium all losing market share. And Graco, which is positioned at the high end of MPP is the beneficiary of that, because consumers are deciding I don’t need to buy a $1,400 car seat when I can buy a $500 car seat that’s very good. So that’s one that we feel good about our trajectory.

And then the couple of categories that I would mention where we’re disadvantaged would be things like we have a metal trash can business in Rubbermaid consumer products that’s sourced from outside The U. S. That some competitors have U. S. Manufacturing toaster ovens, but they tend to be small categories that represent a small percentage of the Newell business.

Unidentified speaker: Okay. That’s right. Knew you made Toast Revan.

Chris, Newell: Yes. Exactly.

Unidentified speaker: Okay. Let’s go a bit into these distribution wins because you’ve now $35,000,000 in incremental sales as a result of these tariff advantaged categories. Should we take that 30% to 35% and kind of run rate it into 26%? Or you mentioned it can grow. Does it grow as retailers reset shelves?

Like I just So understand a little bit of that flow

Chris, Newell: that if I take that $35,000,000 that we’ve just updated five minutes ago with externally from 30,000,000 and say, how does that go to next year? There’s a part of the 35 that is a line review reset that where the retailers are resetting and giving us more shelf space. That should be sustaining. And there’s a part of it that our merchandise wins for promotional events that are sort of more you win it this year and then you hope you win it next year, but you don’t know that you’re going to win it next year. And so part of it sustains, part of it doesn’t.

The way I would think about it is the 35,000,000 will be in the base as we head into the back half of next year. But I expect that the wins next year from what we see will be a bigger number than 35,000,000 incrementally versus this year. So in other words, I expect not only will we lap the 35 but we’ll add on more than that based on the full year impact next year. And that incremental next year will probably be more significant in the front half of next year because we’re not lapping anything versus the back half when we’re lapping the 35%.

Unidentified speaker: Okay. And then I believe there’s other distribution wins beyond things that are kind of directly related or influenced by the scope of tariffs. So is that right? Maybe could you quantify or talk a little bit about what that looks like?

Chris, Newell: Yes. So one of the things we’ve been working on is improving the company’s new product innovation pipeline. So when we started on the strategy refresh, we did an assessment of our innovation pipeline and concluded that we were terrible. And so we completely reset the innovation process and pipeline. As perspective, we put in a tiering system of Tier one, Tier two, Tier three and Tier four innovations.

Tier one and Tier two innovations, I think we had one or two in all of 2023 as a company. Last year we had eight. This year we’ve got kind of a mid teens number. So we have significantly ramped up impactful high quality consumer based innovation. And as we’re doing that, we’re gaining distribution when we bring those initiatives to market.

And so as an example, I mentioned in the baby category that the easy turn convertible car seat, the SmartSense Bassinet and Swing, that’s allowing us to go to retailers with a category growth story that says we’re the ones that can turn the category growth around. But in order to do that, you’ve got to support our innovation that we’re bringing to market. And we’re starting to get stronger and stronger traction from retailers and starting to win an ever increasing set of distribution. So if you look in The U. S.

For example, we put in one of the other things we weren’t doing historically was tracking distribution. We’ve now as of about one years point ago put a sophisticated tracking system in place. But we were losing distribution pretty consistently up until about the middle of this year. We now as we go into the back half of this year are turning net positive on distribution for the first time since we’ve put the new strategy in place. And so as we go forward, we can see that distribution should go from what was a headwind on revenue to being a tailwind.

Unidentified speaker: Okay. Great. Let’s keep going on innovation. Is pipeline So stronger? You gave us examples of Tier one and Tier two.

So it’s quality and quantity. But from the outside, I guess, it can be difficult to know if innovation will matter. A lot of times, will seem like, that’s a great idea. We don’t know if it ended up mattering. So I guess how should an outside investor judge the quality of innovation?

And also, how do you think about launching innovation against this subdued macro backdrop?

Chris, Newell: It’s interesting. So we went back and looked at because we’ve launched a meaningful number of this of these sort of, call it, 15 Tier one and Tier two innovations this year. So let’s say we’ve launched 10 of them already in the first half or something like that or maybe something like that. Some of them launched at different periods of time. But from what we’ve seen so far in total, we’re actually doing better than we thought in terms of revenue, incremental revenue, margins and net present value on that innovation portfolio.

We’ve got some that are doing dramatically better than we thought and we’ve got some that are doing worse than we thought and that’s okay because we’re not going to get it right all the time. But as a portfolio in total, we’re actually doing better than what we projected. So that’s the first thing that gives me confidence that we’re on the right track. On the ones that we’re doing better than we thought, we’re asking ourselves how can we double down and invest more behind the winners. This year, we’ll have the largest A and P budget as a percent of sales and as an absolute dollar amount.

It’s already embedded in our guidance in recent history. And we’ve used the gross margin improvement to effectively fund higher A and P spend, which is effectively going against these leading innovations has been the model that our playbook. And we’re seeing consumers resonate even in this environment to that. So consumers are responding when we come out with innovation, because the innovation is compelling from a value perspective and the price points generally that we’re asking consumers to pay on a good part of our business is not high enough that it’s going to make the difference in their lifestyle. And the products are representing a good value.

So I’m pretty optimistic that innovation still matters and will continue to matter as we go forward.

Unidentified speaker: Okay. Let’s take just looking at my questions quickly a closer look at your assumptions for the back half. So I wanted to just check-in on how back to school has gone at earnings. Sell was constructive. We now have another month of data.

Chris, Newell: I

Unidentified speaker: still haven’t taken my kids back to school. So that’s just this weekend. But curious what you can tell us about consumption.

Chris, Newell: Yes. So when we talk about back to school, we talk about a twelve week period that basically goes from around July 1 to around September 30. We’re eight weeks into the twelve week period at this point in terms of data that we see that’s not public because we get data in advance of what becomes public. Based on that eight week data, you’re right, our sell in was terrific. The back to school season, we I think I said got off to a little bit of a slow start, but then started to accelerate and that trend has continued.

And so as we sit here today through the first eight weeks, we’re seeing on the Writing business, which is our primary back to school business, category growth is about flat this year versus last year is the first thing I would say. And so that we think is positive and about in line with what we had expected. The second thing I would say about back to school is that we haven’t seen prices move up in the Writing category really at all, not just by we don’t need to raise prices because we’re manufacturing in The U. S, but much of the private label and the competitive brands are coming from outside The U. S.

And are subject to tariffs. They have not praised prices, so they protected prices during back to school. We think that’s because many of these companies brought their back to school inventory in before the tariffs took effect. The thing that we’re now going to be into in the month of September, which is always the largest month of the quarter for us in Q3 is the replenishment orders, because July and August is more about the setup, September is more about the replenishment orders. And the thing that we’re watching is we think that some of these competitors are going to have to replenish now at the higher cost base.

And so we’re watching the pricing dynamic carefully as we go forward.

Unidentified speaker: Is there a chance that, that manifests differently that they don’t price, but they pull back Like is that another scenario for this year anyway?

Chris, Newell: It’s possible. And we’ve got our strongest marketing plan, our strongest marketing spend, strong innovation and a cost now and increasingly cost advantaged position because of our U. S. Manufacturing footprint. So I’m optimistic about where we’re headed on this business as we go forward.

We also have, I think I shared one of our previous discussions, we’ve done a big shelf aisle reinvention with one of the leading retailers and that aisle reinvention, which disproportionately benefits our brands gets reset in October. And so we should see distribution gains start to ramp up on the Writing business in Q4 as well.

Unidentified speaker: Okay. Great. Speaking of Q4, so one area of focus for investors has been core sales in general and the time line to inflection to growth. At the midpoint of the fourth quarter guidance or implied fourth quarter guidance, I should say, it would have core sales flat. So what dictates that?

To what, if anything, could drive upside? And let’s also talk, frankly, about risk to the downside and this sort of questionable consumer environment and the notion that inflation will start to show up more now in store?

Chris, Newell: Yes. I think there’s a couple of things. One of the questions we’ve gotten to your point is, boy, if your Q3 guidance was negative 2% to minus 4% and the implied is relatively flat in Q4, why is there an improvement in Q4 versus Q3? And I think there’s three things that are in our that we would say are positives as we think about Q4 versus Q3. The first one is we have stronger innovation hitting.

The Yankee Candle Restage, which is our biggest innovation of the year, really comes into play in full force in Q4 and we’re optimistic that that’s going to drive a meaningful growth on that business that’s disproportionate in Q4. Second thing is, in Q3, we did have some retailers that shifted how they buy products from us from direct import where they take possession of the product in Asia to buying from us in The U. S. From our distribution centers. And when that happens, it causes a retailer inventory reduction because they transfer basically the thirty days of inventory on the ocean from them owning the inventory to us owning the inventory.

That has about one point of negative impact in Q3 that we think is one time and is not going to repeat in Q4. And then the third thing is this tariff advantage selling that we’ve talked about is really more pronounced in Q4 than it is in Q3 just because of the timing of when it’s going to present itself. So we think we’ve got a plot to have Q4 be significantly better than Q3 from a core sales perspective.

Unidentified speaker: Okay. And then those sound like almost mechanical effects, not to be too flippant. But what about the consumer, right?

Chris, Newell: Mean Yes. The consumer remains under pressure, as I said, particularly the low income consumer and the mid income consumer. And we know that the consumer is focused on value. And so we are focused on value. And many of our brands are not positioned as HPP brands.

Many of our brands are positioned as leading brands in the MPP and we still have some exposure to OPP, the higher end of OPP. So we think if we do our job right on consumer insights, innovation, brand communication and particularly focusing on value, we think we can navigate this environment well and we’re well positioned to do that. We cannot outrun the category to a great degree. If we if I were to say, boy, if you’re firing on all cylinders from things you can control, we should be able to ultimately grow and maybe a couple points faster than the category, if we’re doing our job well. So if the category is minus two, that we should be able to do a couple of points better than that.

But as I said, we are laser focused on getting back to top line growth. I think we’ve proven that we can improve the structural economics from a gross margin standpoint. We’ve proven that we can drive cash and improve the balance sheet. We know that the next thing is for us to get to top line growth. We think that the market is actually the consensus is we’re not going to be able to do it by the way I think, if you look at where we’re trading.

And so that gets us excited because we think when we do it, there’s a real opportunity for us to get rerated. Yes.

Unidentified speaker: Okay. Let’s just pivot to second half margin expectations. So from a gross margin perspective, tariffs are a drag in 3Q. Can you just talk a bit about the 3Q tariff impact and help us understand why you get back to margin expansion in the

Unidentified speaker: fourth No, great question. So since we put the new strategy in place, we’ve had eight consecutive quarters of meaningful gross margin expansion. That will be put a little bit at risk in Q3, but as you said it’s specifically because of the tariff dynamics that have been at play. We have incurred about $155,000,000 of gross cash impacts on a net basis that hits the 25,000,000 P and L. That’s more like $105,000,000 which for us is about $0.21 a share.

In our last earnings call, we talked about the fact that that would hit us $02 in Q2, dollars $0.01 1 in Q3 and then about $08 in Q4. Of that $0.21 impact, we have found ways to offset $0.16 of it. And the reason we chose to offset $0.16 instead of the full $0.21 was because there’s a nickel that relates to the 125% China tariff that was basically levied against us on shipments that were in transit. That’s a nonrecurring item, right? So we don’t want to make any short term decisions that would take away from the strong A and P plan.

We have the second half of the year, the strong capability build out we have on the overhead side of the house. And so we’ve chosen to effectively allow that nickel simply to pass through. It will not be reoccurring next year. And of course, that nickel is about $25,000,000 and that puts our gross margin trend a little bit at risk in Q3. But when we get to Q4, we fully expect our gross margin to expand once again.

Unidentified speaker: Okay. Great. Let’s think a little bit longer term on gross margin expansion beyond this year. Kind of what are the key drivers of continued expansion? And how should we think about incremental volume as a driver versus other levers?

Unidentified speaker: Yes. So we have, as I just mentioned, expanded gross margin over the last period of time such that our second quarter print had the two year stack of six eighty basis points. That’s a pretty remarkable feat. On a trailing twelve month basis, that comparable number would be six thirty basis points of gross margin expansion. We have principally done that by having a world class supply chain and procurement team that have been driving meaningful savings through the fuel productivity efforts that are all encompassing.

At any given time, we literally have thousands of projects we’re tilting against and they’ve been delivering best in class performance. Best in class performance is typically perceived as being around a 3% COGS takeout per annum. We’ve been running in the 4%, 5% range. And they’ve done that importantly without the benefit of any unit volume. As we sit here today, because we have put about $2,000,000,000 into our automated facilities since the 2017 Jobs Act, We have a network that Chris alluded to of 15 domestic plants, including two on the Mexican border that are 100% USMCA compliant that are poised to generate really attractive marginal economic unit returns.

You think about last year, our gross margin was 34% as a company. We think the next incremental unit coming off our automated facilities is roughly at 50% on a gross margin basis. And even more importantly, if you look at our op margin last year, it was 8.2%. We think the pass through rate on that next incremental unit is effectively 45%, because 25% of our cost of goods sold is effectively fixed and our overhead which is roughly 20% of sales is largely fixed as well. So these tariff advantage wins that Chris was talking about should monetize themselves in very, very short order.

And as we think about on a going forward basis, we’re really just at the beginning of our journey as it relates to the peak. Peak is kind of our Lean Sigma, Six Sigma equivalency. And there’s really six stages to that. One is foundations, two is base camp, then you have climbs one, two and three and then you attain the summit. For our 44 facilities, we only have one facility that’s gotten to climb two.

So we’re really at the very beginning of our journey. Now in addition to that, as we continue to bring innovation online, we’ve made a dictum that all innovation going out the door is at least 500 basis points accretive on the gross margin line and that’s going to continue to build and expand. And we’re going continue to leverage those bigger initiatives into years two and three, which should provide additional ballast. And we’re doing a much better job with our management reporting systems. And so mix management is still a huge opportunity for us as well.

So we are exceedingly confident that we’re going to be able to continue to transform the structural economics of the business. Our near term goal is to get to a gross margin of 37% to 38%. We think the right level of A and P spend for us is somewhere in the 6% to 7% range. We expect to finish this year closer to six percent having started at 4% not that long ago when we put the strategy in place. And we think because of a lot of the AI enablers and other things that are coming down the pike, we can get our overheads as a percent of sales into the 17 to 18% range.

If we do all those things and we’re confident that we’ll be able to do so, that would put our normalized op margin in the 12% to 15% range. And you contrast that with 23% when we were at 624% we were at 8%. This year, we should finish closer to 9%. You can see the real value creation opportunity that, that suggests.

Unidentified speaker: Okay. Fantastic. Capital allocation. So you’ve pruned the brand portfolio significantly. When we ask about divestitures further, the answer is no.

But we do have a number of investors that look at certain segments like Outdoor and Rec, in particular, where there’s been this protracted history of challenges and really do question if Newell had the right to win in those categories. So you’re still at 5.5x leverage. Think proceeds could help accelerate that pay down. So just how do you think about the right to win in Outdoor and Rec? And would it make sense to be open to a divestiture to bring down leverage?

Chris, Newell: Yes. So I think a couple of things. One is we’re very focused on shareholder value creation. We have looked at sort of divestitures. We don’t see a path for divestitures to help from a value creation path for a variety of reasons.

Number one, we have a very low tax basis today because we’ve done 10 big divestitures since the Jarden acquisition. Number two, we’ve got a highly synergized at this point go to market and supply chain and back office. So the dis synergy impact is actually fairly significant. And number three, most importantly, we think these are businesses we can win in. And so on Outdoor and Rec to your question, that’s the business that we said was the furthest behind when we started the strategy.

So we’ve been very clear from the beginning that this was going to be the laggard and the innovation wasn’t going to start to hit until 2026. On that business, that business when we started the strategy was based in Chicago. We completely closed the Chicago office and eliminated the vast majority of the organization and moved the business to Atlanta and hired a brand new team. That brand new team is now on the field. They populated the consumer understanding, the insights, the innovation.

That innovation, I’m feeling pretty excited about. We haven’t announced all of it yet for competitive reasons, but it’s coming next year. So I’m very confident that the Outdoor and Rec business is going to be stronger on core sales growth next year versus this year or last year. And we’ve got several of those big innovations on Outdoor and Rec that are going to launch starting actually at the beginning of next year, like in January. And we’ve shared them with leading retailers and we’ve gotten strong positive reaction.

So I think we’re on the right trajectory there. And I think you’re going to see us get back in the game in a strong way.

Unidentified speaker: Okay. Great. I’m just going to flip it. You’ve increased financial so not leverage, but you’ve increased financial flexibility redeeming the April 26 bond. So I think some investors have looked at some of your Gen merch peers and wonder if there are any brands that are better suited under Newell’s umbrella than their current owners.

So is an acquisition something you’d consider in the near to midterm?

Chris, Newell: Yes. I don’t I think in the near term probably no. We’ve still got a little bit of work to do to finish the complexity reduction work, which by the way we’re making incredible progress on in terms of ERP systems, legal entities, brands, all of that and continue to delever and continue to bring the top line front end capabilities online. That being said, the midterm, I do believe that acquisitions will be a part of our future at some point, not large acquisitions, but sort of tuck in medium acquisitions where we can add a tremendous amount of synergy to either top line and margin, I think that is a source of value creation for the company over time.

Unidentified speaker: Okay. Very quick wrap up question. So because I’ve got But just given the volatile external environment, I think a lot of people kind of lose sight easily of all the changes that have been underway at Newell and embarked upon before tariffs became like the number So if you just step back and think about the longer term when hopefully the tariff dynamics have settled out, where what are you most excited about and for people outside of Newell to start

Chris, Newell: excited about the opportunity for value creation overall and for a lot of the progress that we’ve made that is less visible through the financial results. And so the complexity reduction work is remarkable. And it’s coming almost to an end, which is exciting because we’re now into the new model with the complexity being reduced. We’ve also, as an example, when we put the capability investment projects together, one of the ones we took on was artificial intelligence. A lot of people have talked about artificial intelligence.

I think we’ve done a better job than most at getting going on that. And we haven’t just done it to take cost out, but we’ve done it to fundamentally improve capability. So for example, in our marketing our digital marketing area, this year in the first half of the year, our digital asset creation is up 500% versus last year for the same cost. So we’re literally 500% more effective because we’ve created a series of AI applications that is allowing us to create digital content at a much more compelling, much lower cost basis than what we’ve been doing before. And I could give you 25 of those examples that I think are geared toward getting the company back to top line growth, which is sort of the last remaining piece, I think, of what we need to drive to solidify the turnaround.

Unidentified speaker: Okay. Great. Please join me in thanking Noel for being with us, we will continue in breakout.

Chris, Newell: Thank you.

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