Newell Rubbermaid Net Rises 11 Percent in Q3; Launches Streamlining Initiative
ATLANTA--As the company initiated a new campaign to reduce the complexity of its structure, Newell Rubbermaid reported a gain of 11.3 percent in third-quarter net income, to $132.1 million.
The housewares giant's bottom line for the quarter, which ended on Sept. 30, provided numbers on a "normalized" basis, which included items such as impairment charges. Without those items, Newell Rubbermaid has a net loss of $177.6 million.
The new program, titled "Project Renewal," is a global initiative intended to achieve cost savings and increase investment in "the most significant growth platforms within the business," according to a company statement. Newell Rubbermaid plans to consolidate its current three operating groups into two and 13 global business units into nine. The new operating groups will be Newell Consumer and Newell Professional--with Penny McIntyre, currently president of office products, to head the former and William Burke, currently president of tools, hardware and commercial products, to head the latter.
The new structure will go into effect on Jan. 1, 2012. Newell said it would announce the final alignment of the global business units at a later date.
Third-quarter net sales rose 5.8 percent to $1.5 billion, with tools, hardware and the commercial segment being the primary drivers. Gross margin slipped by 100 basis points to 37.4 percent. Selling, general and administrative expenses edged up 0.5 percent but dropped 70 basis points as a percentage of sales, to 24.7 percent.
Michael Polk, president and CEO, called the third-quarter results "a solid step forward. These are good numbers in the context of a really tough macro environment and represent progress towards our goal of delivering consistent predictable results and sustainable profitable growth."