Newell Rubbermaid Inc.
), the producer of Sharpie pens and Rubbermaid containers,
reported fourth-quarter 2013 adjusted earnings per share of 47
cents, beating the Zacks Consensus Estimate by a penny and
surpassing the year-ago quarter earnings of 43 cents. Results
benefited from enhanced operating performance, lower share count
and lower tax rate.
On a reported basis, including special items, the company
reported earnings of 41 cents per share, compared with 35 cents
in the comparable year-ago quarter.
During the quarter, Newell's net sales increased 2.9% to $1,489.8
million, compared with $1,447.2 million in the prior-year
quarter. Core sales of the company grew 4.4%, excluding a
negative impact from foreign currency translation. Moreover, the
company's top line outpaced the Zacks Consensus Estimate of
Newell's gross profit rose 3.8% year over year to $557.0 million,
while adjusted gross profit grew 3.3% due to one-time items
recorded in the year-ago quarter. Adjusted gross margin expanded
20 bps to 37.4%, benefiting from improved productivity and
pricing, largely offset by cost inflation and a slightly
Adjusted operating income increased 3.2% year over year to $182.0
million, while operating margin remained flat at 12.2%. During
the quarter, the company benefited from the cost savings
generated by the Project Renewal initiatives that were diverted
towards advertising and promotional expenses. This was offset by
an over 80% increase in advertising expenses during the quarter
compared to last year.
Analyzing Fiscal 2013
For fiscal 2013, the company reported adjusted earnings per share
of $1.83, in line with the Zacks Consensus Estimate and above the
prior-year earnings of $1.67. Net sales for the year totaled
$5,692.5 million, up 2.0% year over year. However, full-year
sales fell short of the Zacks Consensus Estimate of $5,685.0
Other Financial Details
Newell ended the year with cash and cash equivalents of $226.3
million and long-term debt of $1,661.6 million. Shareholders'
equity was $2,075.0 million.
During the fourth quarter, the company's capital expenditures
came in at $52.5 million with full-year capital spends totaling
$138.2 million. Total operating cash flows generated in the
quarter were $304.2 million with full-year cash flows of $605.2
million. During the quarter, the company returned $42.0 million
to shareholders through dividend payouts and repurchased 9.4
million shares under its $350 million share repurchase program.
Fiscal 2014 Guidance
Following a strong end to fiscal 2013, the company initiated its
full-year 2014 projections, guiding adjusted earnings in the
range of $1.94-$2.00 per share. The company's 2014 adjusted
earnings forecast excludes $100 - $120 million expenses related
to the Project Renewal restructuring and other restructuring
Further, Newell anticipates core sales growth of 3%-4% and an
improvement of up to 40 bps in the operating margin during fiscal
2014. The company's sales forecast assumes a negative impact of
about $100 million from foreign currency translation.
Newell expects to generate operating cash flow in the range of
$600-$650 million in 2014, with planned capital expenditures
between $150 million and $175 million.
Moreover, this Zacks Rank #3 (Hold) company expects to achieve
its targeted annualized cost savings of $270-$325 million by the
second quarter of fiscal 2015, through its Project Renewal
The initiative will be funded by savings through a reduction in
structural selling as well as general and administrative
expenses. The Project Renewal scheme will enable the company to
reduce the complexities of the organization, while increasing
investments in the most important growth areas within the
Other Stocks to Consider
Other stocks that are worth considering in the retail space
Haverty Furniture Companies Inc.
Tempur Sealy International Inc.
). Of these, Conns carries a Zacks Rank #1 (Strong Buy), while
Haverty Furniture and Tempur Sealy hold a Zacks Rank #2
CONNS INC (CONN): Free Stock Analysis Report
HAVERTY FURNIT (HVT): Free Stock Analysis
NEWELL RUBBERMD (NWL): Free Stock Analysis
TEMPUR SEALY (TPX): Free Stock Analysis
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