ATLANTA-Declining sales and margins slashed 31.7 percent from Newell Rubbermaid’s bottom line in the first quarter, with net income totaling $54.2 million.
Net sales for the quarter, which ended on March 31, slipped 0.8 percent to $1.2 billion, and gross margin was off 80 basis points, finishing at 38.2 percent. Michael Polk, Newell’s president and CEO, said the company’s commercial products, tools and baby and parenting operating segments were “particularly strong” in the quarter, and that Newell made further progress in its Growth Game Plan.
The Growth Game Plan is Newell’s strategy to increase profits by concentrating its business on consumer brands and professional brands. “In that context,” Polk said, “we have taken steps to strengthen our portfolio by initiating a process to sell our hardware and teach platform businesses, which together represented 2012 net sales of slightly more than $300 million. The divestiture of these businesses will help to create a faster-growing, higher-margin and more focused portfolio, enabling us to drive accelerated performance.”
Selling, general and administrative expenses were down 3.2 percent in dollars and 70 basis points as a percentage of sales, to 27.5 percent.
Newell said it now expects 2013 to produce core sales growth of from 2 to 4 percent, and an increase in normalized operating margin of up to 20 basis points.