Newell Brands Inc. NWL stock has plunged 36% in the past three months against the industry’s 1.1% growth and the broader Zacks Consumer Staples sector’s return of 3.6%. It has also underperformed the S&P 500’s decline of 3.8%. The downturn reflects a combination of broader market headwinds and specific issues within the company, raising concerns about its prospects.

NWL Stock's Price Performance

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Closing the trading session at $6.58 yesterday, NWL stock stands closer to its 52-week low of $5.39. It is also trading below its 50- and 200-day moving averages, indicating potential weakness in the stock's momentum.

Here’s Why NWL Stock is Losing Momentum

Newell is facing headwinds due to several challenges impacting its financial performance and growth prospects. The company has been navigating a difficult macroeconomic environment, with inflationary pressures over the past several years contributing to muted demand for discretionary and durable products. In 2025, it anticipates continued challenges, particularly as lower-income consumers remain affected by inflation. Factors like the rising U.S. dollar, changing tax policies and potential tariffs add complexity to the business landscape.

Newell’s Outdoor & Recreation segment, the smallest unit in its portfolio in terms of revenues and profitability, has been underperforming and requires a turnaround. In fourth-quarter 2024, net sales for the segment declined 7.9% year over year, while core sales dropped 3.7%. Although Newell anticipates some improvement in 2025, substantial core sales growth is not expected until 2026, when it plans to introduce key new product innovations aimed at revitalizing the segment.

The company recently lowered its fiscal 2025 sales guidance to a decline of 2-4% year over year and core sales between a 2% decline and a 1% increase. For the first quarter of 2025, net sales are envisioned to decline 5-8%, with core sales anticipated to drop 2-4%. NWL expects a normalized operating margin of 2-4% for the first quarter, down from the 4.8% reported in the prior-year quarter. Normalized loss is expected to be 6-9 cents per share in the first quarter, compared with break-even EPS in the year-ago quarter.

NWL’s Estimates: Is More Trouble on the Horizon?

The Zacks Consensus Estimate for Newell’s earnings per share for the current and upcoming fiscal year has been revised downward in the past 30 days. In the past 30 days, analysts have decreased estimates for earnings for 2025 and 2026 by a penny to 72 cents and 85 cents per share, respectively.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

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Can NWL’s Growth Efforts Ignite a Recovery?

Newell has been progressing with its business strategy by focusing on innovation, building strong brands and improving how it sells its products in profitable markets. The company is also working on making its supply chain and operations more efficient. This strategy has helped improve sales performance across all areas.

Newell has also introduced a new operating method to make the company more efficient, adaptable and focused on innovation. Sales trends improved across all six business units in 2024, with three of them — Baby, Writing and Commercial Products segments  showing growth driven by strong new product launches. The Learning & Development segment and international business also performed well, achieving steady sales growth throughout the year.

Newell’s organizational realignment aims to strengthen its front-end commercial capabilities, enhance consumer insights and improve brand communication. The Realignment Plan is expected to boost accountability, drive operational efficiencies, reduce complexity and free up funds for reinvestment. Key changes under the plan include establishing a cross-functional brand management organization, realigning business unit finance to support the new global brand model and simplifying the regional go-to-market structures.

In 2025, Newell's top priorities include improving profit margins beyond the expected 50 basis points per year by using cost savings to counter inflation and increase marketing investments. The company also plans to reduce debt, improve cash flow and invest in key restructuring projects to enhance long-term efficiency.

Final Thoughts on NWL Stock

Newell Brands faces significant challenges, with its stock declining in recent months and trading below key moving averages. Macroeconomic pressures like inflation, a strong U.S. dollar and tariffs are impacting performance, particularly in discretionary goods. However, strategic initiatives, including the Realignment Plan and operational improvements, could support long-term recovery. Current investors should hold, while new investors may wait for a better entry point. Newell currently carries a Zacks Rank #3 (Hold).

Three Stocks Looking Good

Sprouts Farmers SFM, which is engaged in the retailing of fresh, natural and organic food products, currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Sprouts Farmers’ current financial-year sales and earnings implies growth of 11.9% and 24.3%, respectively, from the year-ago reported numbers. SFM delivered a trailing four-quarter earnings surprise of 15.1%, on average.

Farmer Bros. Co. FARM engages in the roasting, wholesale, equipment servicing and distribution of coffee, tea and other allied products in the United States. It currently holds a Zacks Rank #2. FARM delivered a trailing four-quarter earnings surprise of 34.9%, on average.

The Zacks Consensus Estimate for Farmer Bros.’ current financial-year sales and earnings implies growth of 3.3% and 25%, respectively, from the year-ago period’s reported figure.

United Natural Foods, Inc. UNFI distributes natural, organic, specialty, produce and conventional grocery and non-food products in the United States and Canada. It currently carries a Zacks Rank of 2. UNFI delivered a trailing four-quarter earnings surprise of 408.7%, on average.

The consensus estimate for United Natural Foods’ current financial-year sales and earnings implies growth of 1.9% and 485.7%, respectively, from the year-ago figures.

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Newell Brands Inc. (NWL) : Free Stock Analysis Report

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Sprouts Farmers Market, Inc. (SFM) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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