Can Innovation Revive Growth at Newell Despite Tariff Woes?

Newell Brands Inc. NWL is navigating one of the most challenging operating environments in recent years, marked by elevated tariffs, weaker discretionary demand and currency volatility. While these pressures have weighed heavily on sales and earnings in 2025, management has remained steadfast in its belief that innovation can serve as a critical lever to reignite growth. The company’s strategy centers on strengthening front-end commercial capabilities, sharpening consumer insights and investing behind its most profitable brands, even as short-term financial performance remains under pressure.

Innovation is gaining traction across several of Newell’s core categories, offering signs of resilience amid broader softness. In the Baby segment, new product launches such as Graco’s smart and rotating car seat offerings have resonated well with consumers and helped the category outperform the rest of the portfolio. Similarly, the Writing segment continues to benefit from brand-led innovation, with Sharpie and EXPO expanding into new formats, colors and use cases that support market share gains and pricing power. These categories, which are less discretionary and more usage-driven, provide a degree of stability in an otherwise uneven demand environment.

Beyond product development, Newell is pairing innovation with increased brand investment to amplify its impact. Advertising and promotion spending reached its highest level as a percentage of sales in nearly a decade, underscoring management’s commitment to building long-term brand equity despite near-term margin pressure. This approach is particularly evident in the Home Fragrance segment, where the company executed a comprehensive Yankee Candle brand restage, featuring upgraded formulations, refreshed packaging and a 360-degree marketing campaign. While the segment faced short-term disruption from retailer destocking, early indicators suggest improved consumer engagement and a stronger positioning for recovery.

That said, innovation alone may not be sufficient to fully offset the drag from tariffs and macroeconomic headwinds in the near term. Elevated tariff costs, especially those tied to China, continue to pressure margins and limit earnings upside, even as productivity gains and pricing actions provide partial relief. However, as tariff impacts normalize and demand conditions stabilize, Newell’s sustained focus on consumer-led innovation, brand building and commercial execution could play a pivotal role in restoring growth and reinforcing the company’s competitive position in the longer term.

Newell’s Zacks Rank & Share Price Performance

Shares of this Zacks Rank #3 (Hold) company have lost 22.3% in the past three months compared with both the industry and the broader Consumer Staples sector, which declined 5.7% and 2.1%, respectively. The stock also underperformed the S&P 500, which gained 3.4% in the same period.

NWL Stock's Past Three-Month Performance

Is NWL a Value Play Stock?

Newell currently trades at a forward 12-month P/E ratio of 6.76X, which is notably lower than the industry multiple of 17.65X and the sector average of 16.08X. This valuation positions the stock at a modest discount relative to both its direct peers and the broader consumer staples sector.

NWL P/E Ratio (Forward 12 Months)

Stocks to Consider

United Natural Foods, Inc. UNFI distributes natural, organic, specialty, produce and conventional grocery and non-food products in the United States and Canada. At present, United Natural flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for United Natural’s current fiscal-year sales and earnings implies growth of 1% and 187.3%, respectively, from the year-ago figures. UNFI delivered a trailing four-quarter earnings surprise of 52.1%, on average.

Village Farms International, Inc. VFF produces, markets and distributes greenhouse-grown tomatoes, bell peppers, cucumbers and mini-cukes in North America. It sports a Zacks Rank #1 at present. Village Farms delivered a trailing four-quarter earnings surprise of 155.6%, on average.

The Zacks Consensus Estimate for Village Farms’ current fiscal-year earnings indicates growth of 165.6% from the prior-year levels.

The Vita Coco Company, Inc. COCO develops, markets and distributes coconut water products under the Vita Coco brand name. COCO currently flaunts a Zacks Rank #1. Vita Coco delivered a trailing four-quarter earnings surprise of 30.4%, on average.

The Zacks Consensus Estimate for Vita Coco's current fiscal-year sales and earnings implies growth of 18% and 15%, respectively, from the year-ago figures.

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

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