U.S. Markets closed

Edited Transcript of NWL earnings conference call or presentation 1-Nov-19 12:30pm GMT

Q3 2019 Newell Brands Inc Earnings Call

ATLANTA Nov 21, 2019 (Thomson StreetEvents) -- Edited Transcript of Newell Brands Inc earnings conference call or presentation Friday, November 1, 2019 at 12:30:00pm GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Christopher H. Peterson

Newell Brands Inc. - CFO & Executive VP

* Nancy O'Donnell

Newell Brands Inc. - SVP of IR & Corporate Communications

* Ravichandra K. Saligram

Newell Brands Inc. - President, CEO & Director

================================================================================

Conference Call Participants

================================================================================

* Joseph Nicholas Altobello

Raymond James & Associates, Inc., Research Division - MD & Senior Analyst

* Kevin Michael Grundy

Jefferies LLC, Research Division - Senior VP & Equity Analyst

* Lauren Rae Lieberman

Barclays Bank PLC, Research Division - MD & Senior Research Analyst

* Rupesh Dhinoj Parikh

Oppenheimer & Co. Inc., Research Division - MD & Senior Analyst

* Stephen Robert R. Powers

Deutsche Bank AG, Research Division - Research Analyst

* Sunil Harshad Modi

RBC Capital Markets, Research Division - MD of Tobacco, Household Products and Beverages & Lead Consumer Staples Analyst

* Wendy Caroline Nicholson

Citigroup Inc, Research Division - MD and Head of Global Consumer Staples Research

* William Bates Chappell

SunTrust Robinson Humphrey, Inc., Research Division - MD

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Good morning, and welcome to Newell Brands' Third Quarter 2019 Earnings Conference Call. (Operator Instructions) As a reminder, today's conference is being recorded. A live webcast of this call is available at ir.newellbrands.com.

I will now turn the call over to Nancy O'Donnell, Senior Vice President of Investor Relations. Ms. O'Donnell, you may begin.

--------------------------------------------------------------------------------

Nancy O'Donnell, Newell Brands Inc. - SVP of IR & Corporate Communications [2]

--------------------------------------------------------------------------------

Thank you. Good morning, everyone. Welcome to Newell Brands' Third Quarter Earnings Call. On the call with me today are Ravi Saligram, our President and CEO; and Chris Peterson, our CFO.

During the course of today's call, we will make forward-looking statements. These forward-looking statements involve risks and uncertainties. Actual results or outcomes could differ materially from management's expectations. I refer you to cautionary language available in our press release and the Risk Factors section of our latest Form 10-Q for a further discussion of forward-looking statements.

Please also recognize that we will refer to certain non-GAAP financial measures. Reconciliations between GAAP and these normalized measures can be found in today's earnings release table as well as on the Investor Relations website and in our latest Form 10-Q.

Now I'll turn the call over to Ravi.

--------------------------------------------------------------------------------

Ravichandra K. Saligram, Newell Brands Inc. - President, CEO & Director [3]

--------------------------------------------------------------------------------

Thank you, Nancy. Good morning, everybody, and welcome. I'm absolutely delighted to have joined Newell Brands and I'm excited about the company's future. In the first 30 days of my listening tour, I've visited our eCommerce group, the design center, 2 manufacturing plants and all 7 businesses, during which I've had an opportunity to review our product lines, the state of the business, as well as conduct town halls where I've addressed over 1,000 employees and met with nearly 150 employees in small group settings.

Let me share my early read on the company. We have dedicated and passionate employees who want to win. I admire their resilience. They've gone through a lot of churn in the past 2 years. We can maximize their potential and drive better outcomes through strong leadership and providing clarity and stability of direction and priorities. We have an opportunity to optimize our organizational structure to better leverage our scale, functional capabilities and provide continuity to our go-to-market approach with our top customers. We need to find the appropriate and harmonious balance between being centralized and decentralized without causing significant internal disruption.

We have an opportunity to better integrate our businesses and create a common unified go-forward winning Newell culture. We will work hard to create an external focus, improve employee engagement and develop aligned, cohesive teams. To this end, I've appointed Steve Parsons as our new CHRO, and he joined a week after I did. Steve partnered with me in turning around OfficeMax and is skilled at leveraging human capital and attracting top talent.

We have iconic brands with strong equity that our household names. However, several need to be refreshed and rejuvenated through timely and meaningful innovation that appeal to today's consumer. We will also work on strengthening channel management through appropriate brand segmentation. I'm excited about our foundational eCommerce capabilities at our eCommerce central excellence based in Hoboken. It is very impressive to see that our global online sales are in the very high teens as a percentage of total company sales, excluding our commercial business.

This percentage is much higher than the CPG and durables average. We also have excellent sales teams that call on our e-tailers, and it's very satisfying to see that their efforts have driven double-digit sales growth in online sales and consumption. We do have an opportunity to improve the digital IQ of our individual businesses and become a truly digital-first company. This will serve to build eCommerce as a towering strength and competitive advantage for the company in the long term.

In conjunction with eCommerce, we'll also be sharpening our skills in utilizing influences and leveraging social media. This is an embryonic muscle, but a great way to stretch our media dollars, especially given the more discretionary purchase patterns of our brands.

I have lived in 6 countries and worked across 50, and I've been President of International in 2 companies. With that perspective, I believe international is a tremendous growth opportunity for Newell in the long term. Today, we do not have an integrated Newell business in any country or region. Each business has its own international footprint. And with the recent exception of Canada, offices of each of our businesses are typically not even in the same city in individual countries.

Suffice it to say, our international efforts are highly fragmented. Next to the U.S., our largest country is Canada and it has not yet achieved $0.5 billion in sales. In fact, only 8 countries outside the U.S. has sales over $200 million and one close to $100 million, but our footprint and operations extend to nearly 50 countries.

We do have pockets of strength. We have an excellent Oster business in LatAm that is growing, Yankee Candle in the U.K. that's growing rapidly, a strong brand reputation for Coleman in Japan and strong Writing franchises in Europe and LatAm. Our first step is to understand what we have where in terms of resources and capabilities, prioritize drive countries and categories, and lay down the foundation for becoming a truly global company. This is a long-term opportunity, and we need to tackle it deliberately, systematically and methodically.

Our portfolio of businesses, though, is a tale of 2 cities. It is great to see that Writing, Baby, Home Fragrance and Connected Homes are growing core sales and demonstrating good operational health. Although Rubbermaid Commercial Products and Food are currently declining, I believe these are good businesses. And with the right strategic and executional focus and driving innovation, I'm confident that we'll get these businesses back on track.

And we are challenged by 2 businesses, Appliances & Cookware and Outdoor & Recreation, where we've been out-innovated and these are not short-term fixes. We'll do deep dives into root causes, ensure we have the right level of domain knowledge and institutional memory, get on top of consumer -- core consumer trends, sharpen our category focus and implement well-thought-out turnaround plans.

I agree with the framework of the turnaround plan that Chris has articulated to you, and we'll continue to relentlessly execute against its key tenets with a high sense of urgency. It is heartening to see the progress we're making on reducing complexity in terms of SKU reduction, consolidating ERP systems and implementing productivity programs. The improvement in the cash conversion cycle is terrific and we'll continue to drive this lever to improve cash flow.

I want to take this opportunity to congratulate Chris Peterson on his leadership not only as CFO but as interim CEO. I appreciate his calm, logical manner and rational approach to tackling problems and I have, in a short time, respect his business judgment. I think his recommendation to the Board to keep the Rubbermaid Commercial Products business will pay dividends in the long term. Having worked on B2B businesses for over 20 years, I think RCP could once again become a jewel in Newell's crown in the long term.

I'm pleased to let you know that Rubbermaid was admitted to Fortune's most admired company list in the '80s and also in the top 10 list from 1985 onwards for several years. I say pleased to let you know since some of you millennials on the call may not have been born yet in the late '80s, unlike me. In fact, in 1993, Rubbermaid was #1 on Fortune's most admired list and known for its innovation. I'm confident that we will restore the business to its past glory.

Let me conclude with my key near-term priorities. First, I want to complete my listening tour and meet key external constituents, including customers, suppliers and investors. Second, I want to ensure that we have the right leader and the right leadership teams in place in each of our businesses and functions. My emphasis will be on inspirational leadership, domain and functional expertise, teamwork and collaboration, an ability to be nimble and agile, and have the appropriate level of mental toughness given we're in a turnaround. And last but not least, an obsessive focus on the consumer and customer.

Third, continuing to align on the right level of resources to affect the company's turnaround plan and move forward with an even greater sense of urgency. I'm a cash flow junkie, and Chris and I will continue to focus on reducing our cash conversion cycle. Significantly accelerating operating free cash flow is very critical to reducing our debt and working aggressively to achieve our target leverage ratio.

Fourth, better understanding our portfolio of brands, categories and channels, and developing a long-term plan to win and drive core sales growth. And the fifth priority, better understanding the innovation pipeline and taking the necessary action to accelerate new product development and design refreshes.

On the whole, I'm extremely happy with my decision to join Newell Brands. I'm optimistic about our future. And I want to thank all 30,000 of our employees for their warm welcome, embracing my leadership and their hard work in 2019. Over the coming years, we will be laser-focused on driving sustainable profitable growth, accelerating cash flow to reduce debt and systematically adding to shareholder value.

I will now turn it over to Chris to talk about our third quarter results and the tangible progress we're making on the turnaround plan.

--------------------------------------------------------------------------------

Christopher H. Peterson, Newell Brands Inc. - CFO & Executive VP [4]

--------------------------------------------------------------------------------

Thanks, Ravi, and good morning, everyone. The Q3 results we announced this morning reflect a strong quarter of progress. We are making decisive and strategic choices to turn the company around and drive shareholder value. And we are encouraged with the results thus far and the building momentum within the organization. It's still early days, but we have a number of positive proof points to share with you today.

The financial results were in line or ahead of our expectations across all key metrics. For the second consecutive quarter, 4 out of 7 operating divisions delivered core sales growth. We made further headway on productivity and cost controls which translated into better-than-anticipated margins and earnings per share. And year-to-date operating cash flow of $424 million more than doubled relative to the prior year, reflecting strong execution on working capital initiatives.

The organization is getting back into the rhythm of consistent delivery. These strong results give us the confidence to raise our full year outlook for both normalized EPS and cash flow from operations.

From a strategic perspective, we are making progress on all 5 pillars of the turnaround plan to position Newell Brands for long-term success. One of our most important strategic objective is to return the company to sustainable and profitable sales growth. We're focused on 5 key themes, including launching compelling and differentiated innovation, implementing omnichannel marketing, strengthening customer relationships, driving eCommerce share gains and accelerating the international business.

We believe that retooling and upgrading our innovation and marketing approach and moving to a digital-first mindset are critical to returning the company to core sales growth. This is also key to increasing our brand's relevance and ensuring that we are driving purchase intent across all channels where consumers shop.

We are revamping our innovation approach to increase our speed to market with a focus on insights and analytics, social listening and artificial intelligence. We've created a new process that is bringing external innovation into the company to complement internally-generated ideas. We have moved away from a channel-specific marketing function toward an omnichannel approach.

We started the new digital tech platform implementation this quarter, with 5 sites currently leveraging the new technology. It will take us about 6 to 12 months to roll it out across the portfolio, which will significantly improve the consumer experience with our brands, while at the same time reducing complexity, driving cost savings and improving capabilities.

Although still early days, we are making strong progress on the top line. Writing, Baby, Home Fragrance and Connected Home & Security, all delivered core sales growth this quarter. eCommerce sales accelerated sequentially to a double-digit growth pace, with strong momentum across all divisions. International markets grew core sales as well, although they are still punching below their weight, which presents a meaningful opportunity for growth going forward. In total, our 2-year stacked core sales growth improved by 450 basis points from the second quarter.

Second strategic pillar, improving operating margins through productivity and overhead cost savings, is also showing meaningful progress. We have more than doubled our gross margin productivity funnel since a year ago. From our beginning point of 90,000 SKUs, which excluded the RCP business, we've taken out about 18,000 SKUs to date or 20%, with concrete plans in place to get to the 50% target reduction by the end of next year. We are making good progress on moving excess and obsolete inventory, too, which helps both SKU reduction efforts and working capital. We remain on track to close 3 manufacturing plants and 10 distribution centers by the end of 2019, simplifying our supply chain footprint.

We have a number of initiatives in flight focused on overhead cost reduction. For example, we are integrating the support functions of the Food and RCP businesses, which we believe will better enable top line growth and cost efficiency. We are centralizing and moving a meaningful portion of our consumer service function offshore.

We are on track to reduce our number of consumer service locations from 65 to 6 by the end of next year. We are on track to reduce our office footprint by about 10% by the end of next year. Additionally, we are on track to cut the number of IT applications across the company by 85% by the end of next year as we remove redundancy and simplify.

We continue to make progress on reducing systems complexity and standardizing systems across the organization. During the third quarter, we completed the SAP conversion of Appliances & Cookware in Asia, which gets us to 4 completed SAP implementations in total for 2019.

Our third strategic pillar is strengthening the portfolio. We announced last quarter that we are retaining the Rubbermaid Commercial Products business, and work is underway to optimize its contributions to the portfolio. This morning, we disclosed our decision to keep the Mapa/Spontex and Quickie businesses as it became apparent that the economics of keeping them in the portfolio are more attractive than divesting them. Similarly to RCP, Mapa/Spontex and Quickie generates strong cash flow with operating margins ahead of the total company average. Keeping these businesses will be accretive to sales, operating margins, earnings per share and cash flow in 2020 and beyond.

Mapa/Spontex and Quickie will be included in continuing operations as of the fourth quarter as part of our Food & Commercial business. This means that upon the closing of the U.S. Playing Card transaction, which is currently expected to close by year-end, we will officially conclude our divestiture program.

We recognize that this decision puts pressure on the leverage ratio in the short term. We remain committed to substantially strengthening the balance sheet and reducing our leverage ratio. We have a high degree of confidence in the cash-generative ability of the company and we are comfortable that a short-term deferral of our leverage target is outweighed by the benefits of higher cash flow expectations over multiple years.

With the completion of the divestiture program, it seems an appropriate time to make a change that we have wanted to make, and that is to talk about our leverage ratio as a calculation of net debt-to-EBITDA rather than gross debt-to-EBITDA. As you know, most consumer product companies calculate leverage using net debt. And I believe, net debt is a better measure since it recognizes the benefit of cash on the balance sheet. So under that updated definition, we now expect to attain a leverage ratio of approximately 4x by the end of this year, approaching 3.5x by the end of 2020.

We have spoken to the rating agencies about this change and shared with them the strategic rationale for the decision to keep Mapa/Spontex and Quickie, as well as the financial ramifications. In our view, with the decision being accretive to sales, margins, earnings per share and cash flow, the relatively short delay in reaching our target leverage ratio is a beneficial trade-off longer term.

To that end, the company has successfully completed a $700 million debt tender offer during the third quarter and reduced gross debt by $425 million. Just last week, we announced plans to redeem another $300 million in outstanding debt, which we expect to complete in the fourth quarter. So as you see, we continue to make progress on strengthening the balance sheet.

The fourth plank of our turnaround plan is focusing on accelerating our cash conversion cycle through better working capital management. We are driving significant progress here with more to come. Year-to-date operating cash flow of $424 million is more than double the year-ago number. The team is doing a good job on clearing customer deductions faster, extending payment terms and reducing inventory both through SKU reductions as well as improving our planning and forecasting processes. The results are encouraging with higher-than-anticipated progress to date, giving us confidence to raise the operating cash flow outlook for the full year to $700 million to $850 million from $600 million to $800 million previously.

The last of our 5 strategic pillars is building a winning team and significantly improving employee engagement. Ravi has shared with you his aggressive onboarding schedule and his decision to bring in Steve Parsons as our new CHRO. Steve will be instrumental in partnering with Ravi, myself and the rest of the executive team to lead our people and employee engagement agenda going forward.

Just last week, we got the results of a pulse employee survey that showed significant improvement in employee engagement since the one performed in the fall of 2018, which is consistent with the informal feedback we've been collecting from our town halls. While we still have lots of work to do on this front, it's encouraging to see that employees are feeling more excited about being part of Newell Brands and more confident in the leadership of the company.

Let me turn now to a detailed review of our Q3 financial results. Net sales declined 3.8% versus last year to $2.5 billion. Core sales were down 2.5% toward the higher end of our guidance range. Writing, Baby, Home Fragrance and Connected Home & Security grew core sales, eCommerce grew double digits.

Normalized operating margin contracted 50 basis points to 12.7%, better than our expectations due to strong traction on productivity and cost-optimizing initiatives. Normalized gross margin declined 40 basis points to 35.1% as productivity savings in combination with favorable mix and pricing were more than offset by headwinds from inflation, tariffs and foreign exchange.

The SG&A to sales ratio moved up 20 basis points this quarter, reflecting significant progress on overheads, offset by a planned increase in A&P spend. Debt paydown over the past year resulted in net interest expense savings of $31 million versus last year. We recorded normalized tax benefit of $59 million, which was better than anticipated due to favorable discrete tax benefits.

Normalized net income from discontinued operations was $16 million, below the $55 million in the year-ago quarter, reflecting lost contribution from completed divestitures.

At the end of Q3, we had 423 million diluted shares outstanding. The company delivered normalized diluted earnings per share of $0.73, which was well ahead of our guidance range due to better-than-expected operational performance as well as a more favorable tax benefit. Normalized diluted earnings per share from continuing operations increased 6% year-over-year to $0.69.

Turning to segment results. Please note that we have reorganized our reporting structure to accommodate the move of the Rubbermaid Commercial Products business to continuing operations. Our Q3 financials reflect 4 operating segments versus 3 previously. Appliance & Cookware is now its own stand-alone segment, and we are reporting RCP and Food as one segment called Food & Commercial. There are no changes to the Learning & Development or Home & Outdoor Living segments.

Core sales for the Home & Outdoor Living segment grew 1.3%. The Home Fragrance business continued its momentum from Q2, with core sales growth driven by distribution gains and strong performance from eCommerce and Europe. The Connected Home & Security division had a very strong quarter, partially due to timing of sell-in prior to fire safety month in October, which benefited Q3 at the expense of Q4. Core sales for the Outdoor & Recreation division were down year-over-year as expected.

Our Learning & Development segment grew core sales 0.5%, with both Baby and Writing contributing to this outcome. We were pleased with Writing's performance at back-to-school, where our brands gained market share across the core Writing category. That strong performance was partially offset by softening trends in Slime, which, although still a meaningful business driver for Elmer's, is off from its peak levels. The Baby business also grew core sales, driven by compelling innovation and the strength of our brands.

Core sales for the Appliance & Cookware segment declined to 3.7%, as anticipated. The LatAm business is doing well, but the North America business continues to be challenged. While we are certainly not satisfied with this outcome, it is a significant improvement in the trend versus where the business was in the first half of the year. We are focused on rebuilding the innovation pipeline to drive sustainable profitable growth over the long term.

Core sales for the Food & Commercial segment declined 11.3% this quarter. Our Food business was impacted by a timing shift and the sell-in for Black Friday that will benefit Q4. At RCP, that business has been run for EBITDA maximization while being held for sale, with product line rationalization and lower margin subcategories unfavorably impacting core sales. We believe that with the closer integration into the ongoing operations of the company and a renewed focus on sustainable and profitable growth, we can reignite core sales growth in line with RCP's more attractive historical trends.

Moving on to cash. The company generated $433 million in operating cash flow in Q3, ahead of plan. Year-to-date, operating cash flow of $424 million is more than double the year ago level in spite of the lost contribution from divested business. The improvement reflects stronger business performance as well as the benefits from strategic initiatives taken to improve working capital, including improving the customer deduction resolution process, extending payment terms closer to benchmark levels, taking out SKU complexity and improvements in demand forecasting. We continue to see a significant multi-year opportunity to improve the company's cash conversion cycle.

Before discussing our outlook, I'd like to point out that in the tables to the press release, we provided supplemental information which shows the impact of including Mapa/Spontex and Quickie in continuing operations for Q4 and full year 2018. This move increased both net sales and normalized operating margin, but reduced normalized EPS by $0.01 due to the recapture of depreciation expense on these businesses.

Similarly to our discussion last quarter on RCP, moving Mapa/Spontex and Quickie from discontinued operations to continuing operations requires the company to restart depreciation expense because, in accordance with GAAP, assets held for sale are not depreciated. The annualized noncash depreciation expense for Mapa/Spontex and Quickie is approximately $10 million.

Our updated outlook for Q4 and full year of 2019 will be based on a comparison with the metrics and this supplemental schedule. With that frame of reference, I'll walk through our updated outlook for Q4 and full year results.

For full year 2019, they expect -- the company expects to deliver net sales of approximately $9.6 billion to $9.7 billion, reflecting a low single-digit core sales decline. Normalized operating margin expansion of 30 to 50 basis points to 10.6% to 10.8%. We are tightening the range on both the low and high end. We expect price increases, productivity improvements and overhead cost reductions to more than offset the unfavorable impact from inflation, tariffs and currency, while simultaneously funding additional A&P investment.

We expect the normalized effective tax rate for continuing operations in the high single-digit rate, and we are raising our guidance for normalized diluted earnings per share for the total company to a range of $1.63 to $1.68. We are flowing through some of the upside that we delivered in Q3 and fully covering an incremental $10 million of depreciation from the inclusion of Mapa/Spontex and Quickie.

We are also raising our forecast for cash flow from operations by nearly 11% at the midpoint to $700 million to $850 million, reflecting improved operating performance, better-than-anticipated progress on working capital and benefits from additional tax planning initiatives. This forecast includes approximately $200 million of divestiture-related cash taxes and transaction costs, and restructuring and related costs. The outlook assumes no share repurchases.

As we look to the fourth quarter, we now expect net sales in the $2.5 billion to $2.6 billion range, with core sales declining 2% to 4%. Normalized operating margin will contract 10 to 50 basis points to 11.0% to 11.4%, despite sustained progress on overheads and productivity as we plan to increase A&P spending versus 2018. The normalized effective tax rate for continuing operations is estimated in the mid-20% range. This yields normalized diluted earnings per share for the total company within a $0.35 to $0.40 range, with a diluted share count similar to Q3.

Turning to 2020. While we are early in the budgeting process, I want to share some preliminary perspective of how we are viewing next year. We're closely monitoring the macros, particularly surrounding tariffs and currency movements. We are targeting another year of sequential improvement on top line growth with sustained efforts behind productivity and cost optimization, driving margin improvement, a portion of which is expected to be reinvested behind select capabilities and brand support to set the company up for the long term.

We are still in the early innings of going after the working capital opportunity and are optimistic we will continue to shorten our cash conversion cycle and improved total company operating cash flow year-over-year. We will share more details surrounding our 2020 guidance during our normal schedule of the Q4 earnings call in February.

In closing, we are encouraged by the progress we are driving through the turnaround plan and excited about the longer-term opportunity for this company. Before opening for Q&A, I just want to say that it has been a real pleasure working with Ravi over the past 30 days, and I'm looking forward to continuing the turnaround journey together.

--------------------------------------------------------------------------------

Nancy O'Donnell, Newell Brands Inc. - SVP of IR & Corporate Communications [5]

--------------------------------------------------------------------------------

Okay. Thanks, Chris. Before we turn it over to the operator for Q&A. I just would like to remind you that we're going to ask each caller to limit yourself to just one question. We're going to try to wrap it up on time and at the same time fit in as many callers as possible. So thanks for your cooperation.

And operator, we're ready to take questions now.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) Our first question comes from Wendy Nicholson with Citi Investment Research.

--------------------------------------------------------------------------------

Wendy Caroline Nicholson, Citigroup Inc, Research Division - MD and Head of Global Consumer Staples Research [2]

--------------------------------------------------------------------------------

My question picks up, Chris, on what you were talking about with 2020. In Ravi's comments, there was a lot of discussion about how there's a need for more innovation, there's a need for a lot of work. But I know the turnaround is sort of in full swing and we've been talking about bringing more innovation to some of these categories for a while. So bottom line, do you think 2020 is going to see core sales growth? Or do we have another year of declines in core sales?

--------------------------------------------------------------------------------

Christopher H. Peterson, Newell Brands Inc. - CFO & Executive VP [3]

--------------------------------------------------------------------------------

Yes. I think as we think about 2020, I think what I said is that we're expecting to show sequential improvement in 2020 versus 2019. But consistent with Ravi, in my view, we have a couple of businesses, notably Appliances & Cookware and Outdoor & Rec, that I think are going to be multiyear turnarounds because we need to rebuild the innovation pipeline in those businesses. And those businesses are both competing in about 35 product categories.

So I think it's too early for us to give numerical guidance, but I expect that you'll see us deliver sequential improvement versus this year. I don't expect us to be to the full potential of the company until we get the Appliances & Cookware and Outdoor & Rec businesses turned around. Importantly, though, I do think we're also going to make progress on operating margins, as I mentioned. And I think that you'll see us from an operating cash flow standpoint do even better next year than this year.

--------------------------------------------------------------------------------

Wendy Caroline Nicholson, Citigroup Inc, Research Division - MD and Head of Global Consumer Staples Research [4]

--------------------------------------------------------------------------------

And I assume the comments -- yes.

--------------------------------------------------------------------------------

Ravichandra K. Saligram, Newell Brands Inc. - President, CEO & Director [5]

--------------------------------------------------------------------------------

Yes. Wendy, I -- sorry, Wendy. Yes, I don't want you to take my comments amiss in the sense. I think Chris articulated it very clearly that we will continue to improve. But the tale of 2 cities is a very real issue. And that also applies when you think about we're not sort of an 80-20 rule company. We've got tail channels, tail customers, tail categories. So we either need to really start growing very fast in the businesses that we're growing, and we'll continue to push on that and then find ways to mitigate the declines.

So I think it will just be a matter of -- it's not if, it's just when. And because we are very confident that this will -- we will get to growth, it's just a matter of when. And -- but all our efforts are laser-focused on that. But in the meanwhile, I think all the things Chris said, this is a very good picture of continuing improvements on a lot of metrics, not just on the growth side, you should look at the cash flow and the operating margins and the like.

--------------------------------------------------------------------------------

Wendy Caroline Nicholson, Citigroup Inc, Research Division - MD and Head of Global Consumer Staples Research [6]

--------------------------------------------------------------------------------

And fair to say, though, the stuff you were talking about with the international opportunity which is very exciting, and it's something I think we've been waiting for it for a long time. But logically, that type of growth is more like a 2021 and longer term, that's not something where a light switch can be turned on and add much to the top line next year. Is that fair?

--------------------------------------------------------------------------------

Ravichandra K. Saligram, Newell Brands Inc. - President, CEO & Director [7]

--------------------------------------------------------------------------------

I think, look, we've got -- I think Chris referred to this in his remarks already because there are pockets of growth where we're growing grand in Latin America, and I think I referred to it in my remarks as well. But you're right that the big international opportunity, which is more long term, you can't just return something. Having been president of international in a couple of different companies, the biggest thing with international is people capabilities, making sure you pick the right drive countries so that you don't have flags on maps and really driving for depth rather than breadth.

So it will take us time. But I do think our brands are well suited for the international opportunity. That is very key that -- whether you think about India or China and the kinds of businesses we have with Baby and Writing. These are all tremendous places where population growth is occurring. And I think, long term, this is a fabulous opportunity.

--------------------------------------------------------------------------------

Operator [8]

--------------------------------------------------------------------------------

Our next question comes from Bill Chappell with SunTrust Robinson Humphrey.

--------------------------------------------------------------------------------

William Bates Chappell, SunTrust Robinson Humphrey, Inc., Research Division - MD [9]

--------------------------------------------------------------------------------

Just kind of a thought on the outlook for the upcoming holiday season. Just trying to understand, especially some of your seasonal businesses like Home Fragrance, like Appliances. I mean do you feel you're set-up fairly well? I guess, in particular, do you expect Home Fragrance to continue that growth as you go into the holiday season? And -- or is this more of a there's a lot of things that are in transition, you probably weren't fully prepared to get ready for this holiday season so we'll see more step change going into next year?

--------------------------------------------------------------------------------

Christopher H. Peterson, Newell Brands Inc. - CFO & Executive VP [10]

--------------------------------------------------------------------------------

I think on the Home fragrance business, we've really turned the corner. So Home Fragrance has delivered core sales growth, both in Q2 and Q3. I think we're very well positioned for the fourth quarter. And you can see that we're gaining distribution at our -- at major retailers as we're transitioning the business away from a purely retail store-focused business to more of an omnichannel model, with wholesale playing a bigger role. So I expect on Home Fragrance that we're very well positioned, and you'll see us well positioned to have a strong holiday season in that business.

--------------------------------------------------------------------------------

Ravichandra K. Saligram, Newell Brands Inc. - President, CEO & Director [11]

--------------------------------------------------------------------------------

Bill, I'd just add a quick thing to that. I did my review there. And this was a great example where the leadership works and the team there is verycohesive. And what I like is their strategic shift to redefine the business from Yankee Candle to real Home Fragrance business, and they're looking at different opportunities. And so I think we can -- I think that business has a lot of legs.

--------------------------------------------------------------------------------

William Bates Chappell, SunTrust Robinson Humphrey, Inc., Research Division - MD [12]

--------------------------------------------------------------------------------

And just...

--------------------------------------------------------------------------------

Christopher H. Peterson, Newell Brands Inc. - CFO & Executive VP [13]

--------------------------------------------------------------------------------

The only other thing I would -- go ahead, Bill.

--------------------------------------------------------------------------------

William Bates Chappell, SunTrust Robinson Humphrey, Inc., Research Division - MD [14]

--------------------------------------------------------------------------------

I was just saying, just to follow-up. I mean, there's been transition risk of moving and you still have a fair amount of stores, would you say that's largely behind you?

--------------------------------------------------------------------------------

Christopher H. Peterson, Newell Brands Inc. - CFO & Executive VP [15]

--------------------------------------------------------------------------------

Yes. So this year, we're going to -- we've closed 75 stores to date. We generally closed stores after the holiday period because the way to maximize value is not to close stores going into the holiday period. I would expect that we'll continue to close underperforming stores at the beginning of next year and focus on the stores that are profitable. But what's exciting is that the growth that we're seeing in wholesale is more than offsetting that from a core sales perspective. And so I think that business is well positioned. We're also back to growth on eCommerce in that business. And so both on our direct-to-consumer site and through e-retailers, we're back to core sales growth.

So I think we're navigating that shift well. And the other piece on that shift, in addition to the top line, is that the margin improvement in that business is substantial because the business we're shifting out of underperforming stores is shifting to channels where we make significantly higher operating margins. And so that business this year will be up, and operating income, very strong double digits.

--------------------------------------------------------------------------------

Operator [16]

--------------------------------------------------------------------------------

Your next question comes from Rupesh Parikh with Oppenheimer.

--------------------------------------------------------------------------------

Rupesh Dhinoj Parikh, Oppenheimer & Co. Inc., Research Division - MD & Senior Analyst [17]

--------------------------------------------------------------------------------

So I want to go back to, Ravi, your comment on the brand refreshes. I was curious which brands do you think have the most urgency from a refresh perspective. And then I was also curious in terms of how you think about the time line in terms of how long it could take for a brand refresh.

--------------------------------------------------------------------------------

Ravichandra K. Saligram, Newell Brands Inc. - President, CEO & Director [18]

--------------------------------------------------------------------------------

Yes. Rupesh, good morning, good to hear your voice again. So Rupesh, I think, look, the 2 businesses that are challenged are Outdoor and the Appliance business. Clearly, we've got some brands that were really very prominent in yesteryear, we need to update them. Coleman would be one, definitely, and it's a great brand with a great reputation. But I just think that with the competition that we have had, both at the higher end with Yeti and lower end with Igloo, we just need to get on top. But the brand equity is great. Consumers love the brand. We are doing good marketing things in terms of going to festivals and stuff, but we need a little bit more product innovation. And we've already got that going. But I think there's more work to be done.

I think on the appliance side, if you take a look at like something like Mr. Coffee. And I think that's another brand that, while we put out different things out there, I think that's a brand that we need to think through. I think Calphalon is a great brand and a terrific brand. We just need to get the channel segmentation right and just figure out how we take it to the next level. So those would be just a handful that I would say. The last one I'd say is Contigo, which is a terrific brand. I remember it from my OfficeMax days when it was a pioneer in that segment. I just think they have a lot of potential there. And so we need to drive that a lot harder and a lot faster.

--------------------------------------------------------------------------------

Operator [19]

--------------------------------------------------------------------------------

Your next question comes from Steve Powers with Deutsche Bank.

--------------------------------------------------------------------------------

Stephen Robert R. Powers, Deutsche Bank AG, Research Division - Research Analyst [20]

--------------------------------------------------------------------------------

First off, Ravi, welcome, and thanks for your opening comments. I guess, as you and Chris think about the path ahead, it just seems listening to your prepared remarks and the Q&A thus far that there's so much change in flight. Lots of discrete needs across numerous -- lots of discrete needs and numerous initiatives underway across just all of the company's various business lines. And to your point, geography-by-geography overseas.

So I guess the question is, to what extent are you able to step back and view the company's turnaround as one cohesive program versus just a huge program office of smaller turnarounds? And to the extent that there is one program, how would you summarize the most critical variables towards continued success as you think about 2020?

--------------------------------------------------------------------------------

Ravichandra K. Saligram, Newell Brands Inc. - President, CEO & Director [21]

--------------------------------------------------------------------------------

So let me start with it, and then I'll let Chris take shot at it as well. So Steve, I think one thing -- I'll start with your underlying premise about a lot of change. There is no question that this company has gone through a lot of churn in chain and a lot of disruption. So as I come in new, the thing that I'm telling myself and all our employees and management team, is if we decide to make any change, we need to think about the prize, with the Z, and the price that we pay for it. So is the prize that we're going to get by making any change worth the price that we'll pay? So the cost benefit. So really, we'll not be making changes for the just sake of changes. And so I think that will be very critical.

I do think that when you're in a turnaround, there are different levers you need to pull. And -- but central to this, really, to me, is that, hey, we've got -- if you think about 3 buckets, we've got to get growth and that growth will come through innovation. You've got to get cost down and efficiencies, which will help the margins. So a lot of the things in terms of simplification, whether it's SKUs, systems, all of that just goes into becoming a more efficient organization. And then cash flow.

So really, those are the buttons. We're just trying to -- there may be different initiatives, but we're very clear that there is a cohesive program here and it is not just a project management office that is just churning out. Because, look, one of the things -- one big change that Chris already started and I'm going to continue, this is not going to be a consultant-driven organization. This is going to be run by operators who have a very clear view of both the short term and the long term. Chris?

--------------------------------------------------------------------------------

Christopher H. Peterson, Newell Brands Inc. - CFO & Executive VP [22]

--------------------------------------------------------------------------------

Yes, the only thing I would add to that, Steve, is that when we -- when I came in about a year ago, I went through a listening tour, similar to what Ravi is doing, and we put in place a turnaround plan that we've been executing against for probably the last 9 months. And that turnaround plan, which I laid out at -- in previous earnings calls and conferences, is very focused on the 5 things that we talked about here and that Ravi mentioned as well.

And I think we've had consistency in that turnaround plan over the last 9 months. And so it hasn't been a student body left or a student body right. The tactics underneath it, we're continuing to monitor and we're driving a lot of different change with regard to complexity reduction, productivity initiatives, a change in how we develop innovation and interact with the consumer. But I think all of those things are in the right direction.

And what I'm excited about is that, with Ravi coming in, I think we'll make it even sharper. And I think we can move forward in a very positive way. And we're already seeing the results. This is the third quarter in a row that we've met or beat our plan and expectations on all financial metrics. And so we're 3 for 3, which begins to rebuild credibility as we go forward here.

--------------------------------------------------------------------------------

Ravichandra K. Saligram, Newell Brands Inc. - President, CEO & Director [23]

--------------------------------------------------------------------------------

So I'll just add 2 quick points. When I came in and during the course of time as I was interviewing, I had a chance to look at the turnaround plan. I really think it's very sounded, and it's just back to basics. This is not rocket science. And one can say, "Hey, do you need a highfalutin strategy model?" We've got good brands. We have good people. We just need to execute and be laser-focused on a few things and do them well.

My job, when I come in, part of it is to really inspire our employees to do their best. That, I think, I am -- I fervently believe that employees are at the heart of our business. And we've not, I think, yet today, galvanized the full potential of our employees and how do we get them to believe that there is a great future and that it's additive. And that 30,000 employees is actually equivalent to 300,000 because you're taking all their power and getting them very focused on a few things. And my job is to, with the management team, help explain, bring it down to the basics.

So -- and that starts with let's get focused on the consumer, get focused on the customer, let's understand the trends, get on top of it quickly. Speed is very critical in all of this and be ahead of the curve. And over time, once we get the turnaround effected, look -- we'll look at the next phase. Then we may want to -- for the next growth phase. But right now, back to the basics turnaround is what we need to do.

--------------------------------------------------------------------------------

Operator [24]

--------------------------------------------------------------------------------

Your next question comes from Joe Altobello with Raymond James & Associates.

--------------------------------------------------------------------------------

Joseph Nicholas Altobello, Raymond James & Associates, Inc., Research Division - MD & Senior Analyst [25]

--------------------------------------------------------------------------------

Thank you, Ravi, for your high-level thoughts earlier on the opportunities that you see at Newell. You did emphasize the need for stability in the organization, obviously. And so just to be clear, should we interpret that as there's unlikely to be any major changes in the transformation plan? And again, I realize it's early days but perhaps some mid-course tweaks here and there over the next few quarters.

--------------------------------------------------------------------------------

Ravichandra K. Saligram, Newell Brands Inc. - President, CEO & Director [26]

--------------------------------------------------------------------------------

]

Joe, thank you for that. Look, I think I would not -- because there are 2 plans around, I think there was an old transformation plan, and that is not what I'm referring to. I'm being very crystal clear that it's the turnaround plan that Chris has articulated and talked about each component, which is a back to basics, hey, let's get this company on the right footing.

So because transformation is too highfalutin a word, for me, I'm -- you've got to be very careful about that. We are in the throes of our turnaround, get the basics right. And yes, I think all the tenets of that make a lot of sense, so there is no point in changing when there's no need to and we're making terrific progress.

Now some of the execution will -- and the tactics over time, we'll learn and we'll improve. So for instance, social media. We just are nascent. We got started on it. Now how we do it, we may want to change. I may make some structural tweaks, but there are tweaks, they're not going to be wholesale changes. Leadership team, we have a good leadership team. I may make changes where I feel it's necessary. But what you're not going to see is a complete upside down because I don't think that is right for the company at this stage. We're on a good path, we just need to build on that momentum.

--------------------------------------------------------------------------------

Joseph Nicholas Altobello, Raymond James & Associates, Inc., Research Division - MD & Senior Analyst [27]

--------------------------------------------------------------------------------

That's very helpful. And just shifting gears to North America. Core sales were down 3.8% in the quarter. I think that was pretty similar to the number that we saw last quarter despite increased A&P investments and the strong growth that you guys saw in eCommerce. Was that just a tougher compare? Or was that also due to the inclusion of Rubbermaid Commercial in the quarter?

--------------------------------------------------------------------------------

Christopher H. Peterson, Newell Brands Inc. - CFO & Executive VP [28]

--------------------------------------------------------------------------------

It was a little bit of both. So let me just address that. So if you look at the total company's core sales growth of negative 2.5%., while we're not satisfied with that number, it did represent, on a 2-year stack basis, about a 450 basis point improvement in Q3 versus Q2, speaking to your point on tougher compare and that's certainly true in North America as well. If you look at our guidance for Q4, that represents about another 250 basis point improvement and the 2-year stacked core sales growth trend versus Q3. So although we're still guiding in Q4, down 2% to 4%, we're cycling through tougher compares and we're making sequential progress on our 2-year stacked growth trends.

The higher A&P in Q3 was largely spent behind the Writing business, and I think we were very happy with the results from that. Because Q3 is the all-important back-to-school season for the Writing category, and we won the Writing category during the back-to-school season. So we grew market share in the back-to-school season in the core Writing business and grew core sales per division. The core sales for the division doesn't show the extent completely of how much we won during the back-to-school season because it was somewhat masked by the Slime trend coming off. But the A&P spend certainly played a big role in that effort.

So I think we were pleased with the results from that. It doesn't mean we're not going to look at how do we make it better and more effective going forward. But the core sales came in at the high end of our guidance range and we're excited about the sequential progress we're making and expect to continue to make on a 2-year stacked basis.

--------------------------------------------------------------------------------

Operator [29]

--------------------------------------------------------------------------------

Your next question comes from Lauren Lieberman with Barclays Capital.

--------------------------------------------------------------------------------

Lauren Rae Lieberman, Barclays Bank PLC, Research Division - MD & Senior Research Analyst [30]

--------------------------------------------------------------------------------

As you talked about, this is -- let's not sort of overcomplicate this in terms of what we need to do and not have a big highfalutin strategy and so on, which I really appreciate, let's execute on these brands. One of the things when I looked back over the last couple of years that has, I think, caught these great brands by surprise is the -- is just competition. Sort of that Newell wasn't the only company giving attention to these categories through innovation, through addressing emergent consumer needs.

So Ravi, how are you thinking about that side of the house? Sort of beefing up the consumer and competitive insight and intelligence capabilities to really make sure that you don't fall behind again because that's where the hole you're digging out of, right, from a growth standpoint.

--------------------------------------------------------------------------------

Ravichandra K. Saligram, Newell Brands Inc. - President, CEO & Director [31]

--------------------------------------------------------------------------------

Yes, Lauren. Thank you for that. Look, I think the most important thing for this is you've got to have your organization and your teams have an external focus versus an internal focus. These problems start when you are looking very inwards. In the last several years with the acquisition, with structural changes which might not have made sense, there was also divisions on a development delivery organization that might not have optimized things.

I just think that we've got to get our teams to have that winning spirit and just get on top of trends. Because a lot of these trends we should have seen. And it burns me up that we missed some of them, and I've only been here a month. And I want every employee to feel that way because in consumer brands, you got to have the obsession that you want to delight the consumer and you always got to be ahead of them. So insights become very important. Social listening becomes very important and not being steeped in the past. So you've got to get a 360-degree view of how the consumer is moving and anticipate, and make sure that your innovation cycle is speeding up towards that.

The second part of it is focus. Because, look, you can't -- every innovation is not going to be a needle-mover. So you've got to also have new news. Sometimes, it may just be a packaging refresh. Sometimes, it may be just how you talk about the brands. But there's always got to be new news in a category, in a business where there's discretionary purchase patterns.

So we're going to ramp this up. It's going to take us a little bit of time. And we are in different stages in different businesses. For instance, Writing, where they have the year of the pen. I'm very excited about the things they're doing. And especially with Sharpie and stuff like that.

So I just think they're in different stages. We will get this cranked and go forward. Because I hate to lose out to the competition, because that means we were asleep at the switch and we're not going to let that -- it will take us time to get there, but we're going to rev this organization to really have that competitive spirit and that obsession with the consumer and customer, because you've got to make sure your innovations are as important and favored by the customer and not just for the consumer. So if you get the price point right, the safe channel segmentation's right, et cetera.

--------------------------------------------------------------------------------

Operator [32]

--------------------------------------------------------------------------------

Your next question comes from Nik Modi with RBC Capital.

--------------------------------------------------------------------------------

Sunil Harshad Modi, RBC Capital Markets, Research Division - MD of Tobacco, Household Products and Beverages & Lead Consumer Staples Analyst [33]

--------------------------------------------------------------------------------

Ravi, I just was hoping you can provide some thoughts on your background with OfficeMax and Ritchie Bros. And maybe some best practices or learnings from your experience at those companies, especially as a Newell customer at OfficeMax, and how you think you can apply those experiences to what you see at Newell today.

--------------------------------------------------------------------------------

Ravichandra K. Saligram, Newell Brands Inc. - President, CEO & Director [34]

--------------------------------------------------------------------------------

Thank you, Nik, and it's good hearing your voice again. So Nik, I'd say it's a product of a few things, the experiences. So I have been in -- I've lived in 6 countries, worked across 6 different categories and -- or 6 totally sectors, both B2B, B2C, SC Johnson, where my consumer packaged goods came in. But look, the key thing for me is when you get into a company to always start with a clean slate and say what is the situation here versus do -- oh, I did that, there's a -- don't be formulaic in your approach. That's number one.

There's a second philosophy, which is people come first. You truly got to believe that your people are your biggest asset. And to me, it's not about always, a, you've got to have only the best people but how do you bring out the best in people. Because that is very, very important. And I don't think we have really maximized that potential at Newell. We will go break down the silos and break down all of this -- we've got to fully culturally integrate the company. And I did that at Ritchie Bros. when we bought OfficeMax.

The third is to make sure that, especially if these companies, for one successful leadership, complacency sets in. And you start thinking you believe in your own stuff, and that's when you miss the innovation. It's someone in the garage who comes up with things. And you have set paradigms, whereas the person outside is thinking in a different lens. For me, the fact that I've worked in so many categories helps me look at patterns and say how do you take disparate and view them into one single pattern.

So the other thing I'm very respectful, I think it's very important for domain expertise, institutional memory and knowledge. So that if every -- if you only have generalists running places, you lose a lot of momentum. You need people who have burned time in their jobs, especially in marketing, in sales, because you want continuity with customers, with your top customers, the same people calling.

You also need a cohesive horizontal view. So today, we are, I think, a little bit too much, we're geared from too much centralization to maybe a little bit much on the division focus. How do you harmonize that. So that when you present yourself in front of all the big top customers, there's also a Newell voice in there. So I think a lot of these things that -- for me, the Newell thing is very exciting because it's the culmination of my career for all the experiences I've had to bring to bear.

And the last one I'd say is, today, any company that does not think of itself as digital-first is doomed. So -- and for us, we already have the foundation. But you got -- it can't just be the center of excellence in eCommerce. The entire company has to think digital, social media. So gone are the days you when just said, "Oh, it's all TV." you've got to look at -- and one of the surprises for me when I came in was that maybe a couple of years ago, we didn't really allow social media and influencers, which is shocking. Chris corrected that, and we have now got a nascent initiative going.

So I just think that there are a lot of ingredients in our company for success. They've got proven brands. They've just fallen behind a bit, but I am very confident we'll get them back to their past glory.

--------------------------------------------------------------------------------

Operator [35]

--------------------------------------------------------------------------------

Your next question comes from Kevin Grundy with Jefferies.

--------------------------------------------------------------------------------

Kevin Michael Grundy, Jefferies LLC, Research Division - Senior VP & Equity Analyst [36]

--------------------------------------------------------------------------------

Welcome, Ravi. Ravi, I wanted to come back to a portfolio question. It sounds like you're reasonably comfortable with the portfolio as it currently stands. You also mentioned, though, that the company will be in the process of doing a deep dive on Appliances & Cookware as well as Outdoor & Rec. So I'm just curious, does that leave the door open for potentially some strategic considerations there? At that point, when you're down with the strategic review, is it possible that you do decide to divest those businesses? How do you view the attractiveness of those categories now and the brand's positioning they're in?

It sort of begs the portfolio questions, a company should be in the businesses that they're in and not necessarily the ones that they are in. If the company's balance sheet was in a different position today, would you buy either one of those businesses? Arguably, the answer to that may be no. So I'd be curious to get your thoughts there. And then a quick housekeeping, Ravi, is it your intent to provide long-term targets, sales, profit, earnings growth, et cetera? And if so, when should investors expect that?

--------------------------------------------------------------------------------

Ravichandra K. Saligram, Newell Brands Inc. - President, CEO & Director [37]

--------------------------------------------------------------------------------

Okay. I'll answer the first question. And then I think Chris mentioned that the divestiture program is done. And look, I think at this point, we're quite happy with the portfolio overall. But within the portfolio, because we've got -- so for instance, Appliance & Cookware, we have 36 categories. So -- and we're kind of leaders overall, but we've got to look at, hey, can we really have best in particular segments. And are there certain things that we may want to evaluate, do they make sense to still be in. Because it's very tough when you say we've got to conquer all 36.

So we may want to -- we'll evaluate certain categories, should we prune some. There's also some things that just don't make sense. Like in Germany, I've just learned, we've got a condom brand. And really, that's not strategic to us. So those are the kinds of things that we may want to sharpen our focus. So it's a sharpening of the focus.

I think it's premature for us to really come to any conclusions that just because these 2 businesses are, at this stage, not firing on all cylinders that there shouldn't be a conclusion, that they're not part of the portfolio. We have to look at it, get the turnaround plans. Because they have good brands. These are all highly reputable brands. And look, I worked in my past with a lot of brands that were icons. Holiday Inn, as an example. And so it is just how do you restore them and how do you make them relevant and current. Chris, do you want to add to that?

--------------------------------------------------------------------------------

Christopher H. Peterson, Newell Brands Inc. - CFO & Executive VP [38]

--------------------------------------------------------------------------------

Yes. I'll just say on the guidance point, we'll provide guidance for next year for 2020 on the next earnings call, which is our normal cadence. And I think we laid out at CAGNY sort of long-term aspirations last year, and I don't think -- relative to the benchmarks, I don't think anything has really changed versus that. So that will be our plan relative to updating guidance for next year and beyond.

--------------------------------------------------------------------------------

Operator [39]

--------------------------------------------------------------------------------

Thank you...

--------------------------------------------------------------------------------

Ravichandra K. Saligram, Newell Brands Inc. - President, CEO & Director [40]

--------------------------------------------------------------------------------

Are we done?

--------------------------------------------------------------------------------

Operator [41]

--------------------------------------------------------------------------------

That is all the time we have today for question-and-answer session. I will now turn the call back to Mr. Saligram for closing remarks.

--------------------------------------------------------------------------------

Ravichandra K. Saligram, Newell Brands Inc. - President, CEO & Director [42]

--------------------------------------------------------------------------------

All right. Thank you very much, everyone. I really appreciate your being on the call and your interest in Newell. I believe that our future is bright. And with that, onwards and upwards. Thank you.

--------------------------------------------------------------------------------

Operator [43]

--------------------------------------------------------------------------------

Thank you, everyone. This concludes today's teleconference. You may now disconnect.