Dive Brief:

• Following a round of layoffs last month, Sharpie and Yankee Candle owner Newell Brands reported a fourth-quarter net sales decline of 18.5% year over year to $2.3 billion, according to a press release Friday. The company noted an operating loss of $273 million compared to the previous year’s income of $170 million.
• Newell Brands also announced the company president, Chris Peterson, will take on the chief executive officer job after the 2023 Annual Meeting of Stockholders on May 16. Ravi Saligram, the current CEO and member of the board, is set to retire from both positions.
• The company has also revealed a series of board changes, with Chairman Patrick Campbell exiting the role effective May 16, moving independent director Robert Steele into the position. Additionally, Newell Brands has nominated Gary Hu for election to the board for the annual stockholder meeting, which would increase the board size from 11 to 12 members.

Dive Insight:

Newell Brands — which also owns Oster, Rubbermaid Commercial Products, Mr. Coffee and Expo — is shaking up the company through its Project Phoenix restructuring plan following a difficult quarter.

"Fourth quarter results were in line with our expectations and brought to a close a difficult second half. The business continued to be impacted by a tough operating environment, including slowing consumer demand for general merchandise categories, as well as inventory reductions at retail,” Saligram said in a statement. “We expect the new operating model to unlock additional growth opportunities for the business over time and bring us even closer to our customers and consumers.”

The restructuring plan began in January when Newell Brands said it would cut 13% of its office staff by the end of 2023. Once completed, the company expects annualized pre-tax savings from $220 million to $250 million. It also said it would reorganize its business into three segments with new CEOs for each, creating the home and commercial solutions, learning and development, and outdoor and recreation categories.

For the fourth quarter, the company’s operating margin was negative 11.9% compared to positive 6.1% last year. In part due to higher inventory levels, operating cash outflow was $272 million compared to a cash flow of $884 million in 2021. For fiscal year 2023, Newell Brands projects an 8% to 6% decline in core sales, a metric that "excludes the impacts of acquisitions, divestitures, retail store openings and closings, certain market and category exits, and changes in foreign exchange from year-over-year comparisons," the company said.

“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,” Peterson said in a statement. “We are focused on improving Newell's financial performance by strengthening its cash flow and balance sheet, driving gross margin improvement and overhead savings, while positioning the organization for future growth through capability investments that enhance operational excellence and create value for our stakeholders.”