Newell Brands stock dives after warning of surprise loss in current quarter

Shares of Newell Brands Inc.
NWL,
-3.50%
dove 10.3% in premarket trading Friday, after the consumer goods company, with brands including Rubbermaid, Sharpie, Paper Mate and Graco, beat fourth-quarter profit expectations but warned of a surprise first-quarter loss as a recession looms. The company swung to a net loss of $249 million, or 60 cents a share, from net income of $98 million, or 23 cents a share, in the year-ago period. Excluding nonrecurring items, such as $326 million in goodwill impairment charges, adjusted earnings per share of 16 cents beat the FactSet consensus of 11 cents. Sales fell 18.5% to $2.29 billion but was above the FactSet consensus of $2.23 billion. Gross margin contracted to 26.3% from 29.8%. For the first quarter, the company expects an adjusted per-share loss of 6 cents to 3 cents, compared with the FactSet consensus for a per-share profit of 22 cents, and expects sales of $1.79 billion to $1.84 billion versus expectations of $2.05 billion. “We expect many of the headwinds the company experienced in the second half of 2022 to persist in 2023, as we plan for a recessionary environment,” said President Chris Peterson. Separately, the company said Chief Executive Ravi Saligram will retire, effective May 16, after about four years in the role, and will be succeeded by Chris Peterson as CEO. The stock has gained 8.6% over the past three months through Thursday, while the Consumer Discretionary Select Sector SPDR exchange-traded fund
XLY,
-0.19%
has tacked on 5.8% and the S&P 500
SPX,
-0.88%
has edged up 3.2%.