Newell Gears Up for Q2 Earnings: What Should You Know About the Stock?

In the last reported quarter, the Atlanta, GA-based company’s earnings surpassed the Zacks Consensus Estimate by 44.4%. Its bottom line beat the consensus estimate by 9.7%, on average, in the trailing four quarters.

Factors Likely to Impact NWL’s Q2 Results

Newell’s top-line performance is likely to have reflected gains from front-end commercial capabilities, mainly innovation and new business development, coupled with a more streamlined organizational structure. On the operational front, productivity initiatives, restructuring actions and supply-chain efficiencies are expected to have provided partial offsets to cost pressures.

Newell is focused on disciplined pricing and revenue management by improving customer program efficiency, optimizing promotional spending and implementing targeted pricing actions. It also continues to drive productivity through restructuring initiatives, supply-chain optimization and disciplined cost management to offset inflationary pressures and support margin expansion.

Newell has been strengthening its growth strategy by expanding its pipeline of consumer-focused innovations across its portfolio. The company plans to introduce more high-impact product launches in 2026, supported by greater advertising and retail activation, to drive consumer demand, improve market share and create additional distribution opportunities. Such endeavors are likely to have aided its top line in the to-be-reported quarter. 

On its last earnings call, management had expected both net sales and core sales to be flat to up 2% each for the second quarter. Our model expects sales growth of 1.2% year over year and a core sales rise of 0.6% for the second quarter. We anticipate core sales growth of 0.5% each for the Home & Commercial Solutions and Learning and Development segments, and 1% for the Outdoor and Recreation segment in the to-be-reported quarter.

On the flip side, Newell continues to witness a volatile operating backdrop, along with soft consumer demand, elevated tariffs and commodity cost inflation. Higher raw material and freight expenses are likely to have acted as a major headwind in the quarter under review. Rising resin prices and elevated transportation costs with higher oil prices are likely to have increased operating costs and pressured margins. Management, in its last earnings call, had envisioned normalized operating margin of 9.6-10.2% and normalized earnings per share (EPS) of 16-19 cents for the second quarter. We expect normalized operating margin of 9.7%, and normalized EPS of 18 cents for the quarter under review.

What the Zacks Model Unveils For NWL

Our proven model conclusively predicts an earnings beat for Newell this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is exactly the case here.

Newell currently has an Earnings ESP of +5.36% and a Zacks Rank of 2. You can uncover the best stocks before they are reported with our Earnings ESP Filter.

Valuation Picture

From a valuation perspective, Newell offers an attractive opportunity, trading at a discount relative to historical and industry benchmarks. With a forward 12-month price-to-earnings ratio of 8.41x, which is below the five-year high of 15.23x and the Consumer Products - Staples industry’s average of 18.23x, the stock offers compelling value for investors seeking exposure to the sector.

The recent market movements show that NWL’s shares have gained 17.8% in the past six months against the industry's 0.6% drop.

Other Stocks With the Favorable Combination

Here are some other companies, which according to our model, have the right combination of elements to beat on earnings this reporting cycle.

Fomento Económico Mexicano, S.A.B. de C.V. FMX has an Earnings ESP of +37.42% and a Zacks Rank of 1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is expected to register bottom and top-line increases when it reports second-quarter 2026 numbers. The Zacks Consensus Estimate for FMX’s quarterly bottom line has dipped 10.9% in the past 30 days to 82 cents per share. The consensus mark for earnings indicates an improvement of 95.2% from the figure reported in the year-ago quarter. 

The consensus estimate for quarterly revenues is pegged at $12.9 billion, which indicates a rise of 19.3% from the figure reported in the year-ago quarter. FMX has delivered a negative earnings surprise of 17%, on average, in the trailing four quarters.

Monster Beverage Corporation MNST currently has an Earnings ESP of +2.61% and a Zacks Rank of 3. The company is likely to register a bottom and top-line growth when it reports second-quarter 2026 numbers. 

The Zacks Consensus Estimate for Monster Beverage’s quarterly revenues is pegged at $2.4 billion, indicating an increase of 14.5% from the figure reported in the prior-year quarter. The consensus estimate for MNST’s quarterly earnings of 59 cents per share implies a rise of 13.5% from the year-ago quarter’s level. MNST has a trailing four-quarter earnings surprise of 9.6%, on average.

Coty COTY has an Earnings ESP of +0.03% and a Zacks Rank of 3 at present. The company is expected to register a top-line decline when it reports fourth-quarter fiscal 2026 numbers. The Zacks Consensus Estimate for COTY’s quarterly bottom line has remained unchanged in the past 30 days at a loss of a cent per share. The consensus mark for earnings indicates an improvement of 80% from the figure reported in the year-ago quarter. 

The consensus estimate for quarterly revenues is pegged at $1.2 billion, which indicates a drop of 4.8% from the figure reported in the year-ago quarter. COTY has delivered a negative earnings surprise of 214.1%, on average, in the trailing four quarters.

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

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