Can Newell's Restructuring Efforts Spark a Sustainable Turnaround?

Newell Brands Inc. NWL is banking heavily on its multi-year restructuring plan, Project Phoenix, to stabilize its operations and rebuild profitability. The initiative is designed to simplify organizational structures, streamline the supply chain, reduce overhead and sharpen the company’s focus on its strongest brands.

Management has outlined targeted annualized savings of $220-$250 million by 2025, with resources expected to be reinvested into growth initiatives, such as product innovation and digital expansion. By aligning operations more efficiently and driving cost discipline, Newell aims to create a leaner, more agile business that can better navigate shifting consumer demand.

In second-quarter 2025, signs of progress from these efforts began to emerge. Although net sales declined 5.8% year over year and core sales fell 4.9%, the company delivered a 110-basis-point improvement in the adjusted gross margin. Expense control and restructuring savings were key contributors to this margin expansion, offering evidence that Project Phoenix is starting to offset the pressures of weak discretionary demand and retailer destocking.

Early traction is also visible in select segments like Writing, where sell-through trends and order activity have strengthened, underscoring the potential for a broader recovery if momentum spreads across categories.

The path forward, however, depends on whether these restructuring-driven efficiencies can translate into sustained top-line growth. Management expects sequential improvement in core sales in the second half of 2025, helped by fresher assortments, improved execution and a more balanced inventory environment. If cost savings remain on track and innovation drives stronger consumer engagement, Newell may move beyond stabilization toward a more durable turnaround, though near-term headwinds in Outdoor & Recreation and broader consumer caution remain challenges to watch.

Newell’s Zacks Rank & Share Price Performance

Shares of this Zacks Rank #3 (Hold) company have lost 41.7% in the year-to-date period, underperforming the industry’s decline of 4.1% and the broader Consumer Staples sector’s growth of 2.8%. The stock also lagged the S&P 500’s 13.3% rise in the same period.

Newell Stock's YTD Performance

Is NWL a Value Play Stock?

Newell currently trades at a forward 12-month P/E ratio of 8.43X, below the industry average of 19.89X and the S&P 500’s average of 23.32X. This valuation positions the stock at a premium relative to both its direct peers and the broader market.

Newell P/E Ratio (Forward 12 Months)

Stocks to Consider

Village Farms International VFF is a producer, marketer and distributor of greenhouse-grown tomatoes, bell peppers and cucumbers primarily in North America. The company presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. 

VFF delivered a trailing four-quarter earnings surprise of 122.2%, on average. The Zacks Consensus Estimate for Village Farms’ current financial-year sales indicates a decline of 30% from the year-ago reported number and that for EPS suggests a 137.5% upsurge.

Grocery Outlet GO is a high-growth, extreme value retailer of quality, name-brand consumables and fresh products that are sold through a network of independently owned and operated stores. It currently carries a Zacks Rank of 2 (Buy). 

Grocery Outlet delivered a trailing four-quarter earnings surprise of 28.2%, on average. The Zacks Consensus Estimate for GO’s current financial-year sales and EPS indicates growth of 8.3% and 1.3%, respectively, from the year-ago reported numbers. 

Ollie's Bargain Outlet OLLI is a value retailer of brand-name merchandise at drastically reduced prices. It presently has a Zacks Rank #2.

The Zacks Consensus Estimate for OLLI’s current financial-year sales and EPS implies growth of 16% and 16.2%, respectively, from the year-ago reported numbers. Ollie's Bargain delivered a trailing four-quarter average earnings surprise of 4.2%.

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This article originally published on Zacks Investment Research (zacks.com).

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