(Reuters) – Sharpie-maker Newell Brands Inc on Friday forecast annual sales and profit at the low end of its previous outlook, signaling a hit from softer demand for its products and higher costs.
Shares of the company fell about 2% in premarket trading.
While the supply chain snags gradually ease, the Atlanta-based company is still grappling with elevated costs, including for raw material, as well as slowing demand for its home and outdoor products such as containers and camping gear after a pandemic-induced boom.
Besides, consumers have turned price-sensitive as elevated inflation eat into their disposable income, leaving limited room for spending on non-essential items.
Newell Chief Financial Officer Mark Erceg said “consumer discretionary spending in our categories remains under pressure”.
The company expects 2023 net sales and adjusted profit to be at the lower end of its prior range of $8.4 billion to $8.6 billion, and $0.95 to $1.08 per share, respectively.
Newell also forecasts second-quarter results below analysts’ estimates.
The company expects to post sales between $2.13 billion and $2.24 billion, and profit between 10 cents and 18 cents per share in the second quarter.
Analysts on average expect revenue of $2.2 billion and profit of 38 cents per share, according to Refinitiv data.
In the first quarter, Newell posted a bigger-than-expected loss as margins took a hit due to higher costs.
(Reporting by Aatrayee Chatterjee in Bengaluru; Editing by Shilpi Majumdar)
