New Jersey-based Newell Brands, parent company of Top 40 supplier Sanford Business-to-Business (asi/84833), has announced that its net sales for the fourth quarter ended December 31 were $4.1 billion, a 165% increase versus Q4 of 2015. The firm’s full year 2016 net sales reached $13.3 billion, a year-over-year jump of 124.2%. The large gains were buoyed by Newell’s merger with consumer products company Jarden Corp.
Newell’s core sales – which exclude the impact of currency, acquisitions and divestitures –increased 2.5% for the quarter and 3.7% for the year. Fourth quarter gross margin declined to 36.8% from 38.3%, and fell to 33.2% for the year from 39% for 2015 as a result of the Jarden deal and consolidation of operations in Venezuela.
While the company did not break out its promotional products revenue, it reported that Q4 net sales in its Writing segment (including Sharpie and Paper Mate brands) were $462.4 million, representing core sales growth of 4.3%. Net sales for the year were $1.9 billion, an increase of 10.2% from $1.8 billion for 2015. The company acquired Elmer’s Products Inc. in October 2015, though the benefits of the transaction were outweighed by the impact of foreign currency and consolidation in Venezuela.
Meanwhile, Newell’s Baby & Parenting segment quarterly net sales grew 1.6% to $241.7 million, while yearly net sales grew 8.4% to $919.5 million. Outdoor Solutions net sales were $730.6 million in Q4, a 3.8% increase on a pro forma basis versus 2015, and $2.4 billion for the year. Home Solutions net sales fell 11.5% to $391 million for the quarter and 7.65% for 2016 to $1.6 billion.
“Our fourth quarter results reflect continued strong progress in the company’s transformation,” said CEO Michael Polk, in a statement. “Despite significant portfolio and organization change in the quarter, core sales growth was competitive. We delivered this outcome in the context of challenging mall-based retail conditions driven by accelerating bricks-to-clicks shopper migration during the holidays.”
Operating income was $513.1 million for the quarter (a 403.5% year-over-year increase) and $1.1 billion for the year, an 82.9% increase from 2015. Net income from continuing operations was $165.9 million for the quarter, a year-over-year increase of 308.2%, and $528.5 million for the year, an increase of 103.8%. The increase reflects Project Renewal savings and synergies that were offset in part by acquisition-related expenses, increased advertising costs and the negative impact of foreign currency.
Diluted earnings per share for 2016 were $1.25 compared to $1.29 in the prior year, while operating cash flow was $1.8 billion compared to $565.8 million for 2015.
“This has been one of the most transformative years in our history,” said Polk. “We have made tremendous progress on our strategic initiative to strengthen our portfolio, acquiring businesses with over $10 billion in revenue and divesting or holding for sale businesses with about $1.6 billion in revenue. Our progress on costs has enabled us to improve normalized operating margin by over 100 basis points while simultaneously investing for future growth by strengthening our capabilities in insights, design, innovation and e-commerce.”
Polk went on to say that the company has reduced its gross debt by almost $2.1 billion since becoming known as Newell Brands in April 2016 after its Jarden merger. The company was formerly known as Newell Rubbermaid.
The company expects 2017 net sales to be in the range of $14.52 billion to $14.72 billion, representing growth between 9.5% and 11%, compared to 2016. Full-year core sales growth is expected to be between 2.5% and 4% versus initial guidance of 3% to 4%, reflecting lowered expectations for the company’s retail performance in light of decreased numbers of consumers at U.S. shopping malls.
Sanford Business-to-Business ranks 37th on Counselor’s list of the Top 40 suppliers, with estimated 2015 North American sales of $39.8 million.