(Bloomberg)—Newell Brands Inc., the consumer-products giant that in April, is looking to expand its web presence as consumers continue to shy away from mall shopping.
The move comes as Newell, whose brands include Calphalon, Sharpie and Yankee Candle, saw the shift in habits weigh on fourth-quarter results. While sales more than doubled to $4.14 billion in the three months ended Dec. 31 because of the Jarden acquisition, the total fell short of the $4.27 billion analysts estimated in a Bloomberg survey. Newell is No. 805 in the Internet Retailer 2016 Top 1000 with an estimated $10.7 million in online sales in 2015, according to Top500Guide.com data. Yankee Candle is No. 402 in the Top 1000.
Newell has created an enterprise-wide e-commerce division that will have responsibility for online growth across the company’s portfolio, CEO Michael Polk said Monday on the retailer’s earnings call with analysts, according to a Seeking Alpha transcript.
“As we exit 2016, our e-commerce business has revenue of over $1 billion, has grown over 30% compounded over the last three years, and we expect will more than double and grow by over $1 billion by 2020 as we extend our capabilities across our categories and around the world,” Polk said on the call. “2016 has been the most transformative year in our history, and we’re very pleased with the scope, speed, and impact of the transformation.”
Newell’s been through a “massive amount” of change since the Jarden acquisition and has its “hands full” as it moves to close multiple deals in the next three months, Polk told Bloomberg News in a phone interview. “It feels like we have come through the transition period and that we are now in the startup phase,” Polk said.
The investments in online can’t come soon enough, as store performance for brands such as Yankee Candle and Calphalon fell short the Hoboken, N.J., company’s forecasts as fewer shoppers than predicted went to the mall during the holidays.
Newell also cut the lower end of its 2017 forecast for core sales growth to 2.5% from 3%, while leaving the top end unchanged at 4%. The 2016 rate was 3.7%. Polk said the cut came on the expectation that mall-based retailers will continue to struggle as consumers accelerate the migration to the web.
The company forecast full-year sales of $14.52 billion to $14.72 billion, less than analysts’ estimate for $15.13 billion. Polk expects sales growth to pick up later in 2017 and into 2018.
Newell shares have surged 28% in the past year, outperforming the broader consumer-discretionary group in the S&P 500 Index. The stock is up 5% so far in 2017. Signs of faster wage growth and growing confidence among American consumers has sent retail shares higher since Donald Trump’s surprise election in November.
Polk says the new administration’s promised pro-growth policies likely won’t have any material impact on Newell’s business in 2017, and that it’s too soon to comment on potential reforms to trade and tax regulations.
The “devil is in the detail,” he said. “Winning companies adapt to their environment and take advantages of changes like this to serve their agenda.” On any given topic of reform, there may be “a huge opportunity to consolidate market share.”
Polk was listed among executives assisting Trump on an initiative to create more manufacturing jobs in the U.S., according to White House statement.Favorite