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Newell Makes Management Changes: Will it Hold Good?

Announcing changes to its management, Newell Rubbermaid Inc.NWL disclosed that it has picked Joe Arcuri for the newly created role of Chief Commercial Officer. Further, the company stated that Richard Davies, currently the Chief Marketing and Insights Officer, will be promoted to the post of Chief Development Officer. Both Arcuri and Davies will assume office from Jan 1, 2016.

Arcuri, who currently serves as the President of Home Solutions, has nearly 30 years of leadership experience in global product development, marketing, and general management. His résumé also boasts of holding leadership positions in companies like The Procter & Gamble Company PG .

On the other hand, Davies, who has been with Newell since 2012, has been vested with the responsibility of consumer and shopper insights, brand-building and marketing, innovation development and delivery, as well as ensuring superior design and product experience for the company's customers.

We note that, Bill Burke, who is the current Chief Operating Officer of the company, has disclosed his plan to leave Newell in the first half of 2016 to pursue other opportunities. While Mark Tarchetti, present Chief Development Officer of Newell, will also leave the company at the end of 2015 to pursue other interests.

These management changes are in line with Newell's Growth Game Plan. Under the particular strategy, the company intends to lay off approximately 10% of its workforce, and build a new organizational model as well as leadership team.

We expect these new managerial changes to help the company to keep up its current performance and counter competition as well as economic headwinds. Newell posted spectacular second-quarter 2015 results, wherein both the top and bottom lines improved year over year and exceeded expectations. The company has been delivering positive earnings surprises for over four years now, with an average surprise of 4.2% registered over the trailing four quarters.

However, certain issues have raised our concern. Although Newell generates most of its revenues and profits from its domestic operations, the company has significant presence in the global market. Newell operates widely in Canada, Japan and Europe, which in turn exposes the company to the adverse impact of foreign currency exchange rates. Hence, though management raised its adjusted earnings forecast for 2015, it now expects a negative forex impact of 36-39 cents, compared with 35-37 cents expected earlier, as the U.S. dollar continues to gain strength against other currencies.

Zacks Rank

Newell currently carries a Zacks Rank #4 (Sell). A couple of better-ranked stocks in the same industry include CVSL Inc. CVSL and Energizer Holdings, Inc. ENR . Both stocks carry a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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