No, it’s not bad PR from a fictional fire caused by an unnamed, faultily wired slow cooker that sent Newell Brands stock tumbling more than 20% yesterday. It’s bad results from a hodgepodge of brands that found the company announcing yesterday that it is “exploring strategic options” for its consumer brands — including Rawlings, Goody, Rubbermaid Outdoor, Closet, Refuse and Garage, and U.S. Playing Cards — and its commercial product assets including Waddington, Process Solutions, Rubbermaid Commercial Products and Mapa.
First, about that slow cooker item.
“The fiery ending of Tuesday’s ‘This Is Us’ episode sent fans blazing toward social media to express their horror at the revelation that a family Crock-Pot — which was super old and had a faulty switch — started the fire that killed patriarch Jack Pearson (Milo Ventimiglia),” write Tony Maglio and Jennifer Maas for The Wrap.
“The safety and design of our product renders this type of event nearly impossible,” Newell said yesterday, as Lauren Coleman-Lochner reports for Bloomberg. “Our Crock-Pot slow cookers are low-current, low-wattage (typically no more than 200 or 300 watts) appliances with self-regulating heating elements.”
“Even 'This Is Us’ creator Dan Fogelman sought to allay concerns. The scene depicted a used appliance that wasn’t meant to reflect on current technology, he said,” Coleman-Lochner continues. “Taking a moment to remind everyone that it was a 20-year-old fictional crockpot with an already funky switch? Let’s not just lump all those lovely hardworking crockpots together,” Fogelman tweeted.
“Experts say any backlash the Crock-Pot brand is facing will be short-lived and mild,” Ben Popken writes for NBCNews.com.
“The Levick crisis and reputation management firm analyzed the social media reaction and concluded that ‘all the responses are jocular; people aren't taking this seriously,’” CEO Richard Levick tells Popken. “Instances like the Crock-Pot Twitter kerfuffle are ‘social media hit and runs,’” adds Drew Kerr, president of Four Corners Communications.
Meanwhile, “after spending billions of dollars to scoop up rivals and build a conglomerate of household products,” the Hoboken, N.J.-based company yesterday said it “is reversing course, looking to unload brands and close half its factories,” reports Sharon Terlep for MarketWatch.
“The company sells Sharpie markers, Elmers glue, Rubbermaid containers and Graco baby strollers. It more than doubled in size in 2016 when it acquired Jarden Corp., adding Yankee Candle, Mr. Coffee machines and Coleman camping gear to its portfolio.”
In fact, it changed its name to Newell Brands from Newell Rubbermaid after it acquired Jarden Corp.’s 120 consumer brands in a deal valued at $15.4 billion when it was announced in December 2015.
One of the venerable brands in play is Rawlings, the sporting goods company founded in St. Louis in 1887 and now based in Town and Country, Mo. Rawlings, which Jarden had acquired in 2007, “is the official baseball supplier and official helmet of Major League Baseball, the official baseball for the NCAA and the official uniform provider of USA Football and Team USA” among other designations, according to the St. Louis Post Dispatch. “It ended production of football helmets and football shoulder pads in 2015,” according to the story, and its baseball gloves are no longer made in its U.S. factory, according to the story.
All this came after the company reported early results for 2017.
“The company says it is expecting 2017 sales growth to be 0.8%, which is below its previous guidance of 1.5% to 2%. Wall Street is looking for revenue of $14.78 billion for 2017,” reports William White for InvestorPlace. “Newell Brands Inc. also notes that it is expecting earnings per share for the full year to range from $2.72 to $2.76. Its previous guidance for 2017 earnings per share was $2.80 to $2.85.” And it's “expecting 2018 earnings per share to range from $2.65 to $2.85. This isn’t good news for NWL stock as analysts are expecting earnings per share of $2.94 in 2018,” White concludes.
Newell Brands’s CEO Michael Polk was, as you would expect, upbeat in a prepared statement that accompanied the announcement of the “series of strategic initiatives to accelerate [Newell’s] transformation plan.”
“We believe that exiting non-strategic assets, reducing complexity and focusing on our key consumer-focused brands will make us more effective at unlocking value and responding to the fast-changing retail environment,” says. “A stronger, simpler, faster Newell, together with leading brands, brilliant marketing, outstanding innovation and an advantaged e-commerce capability, better positions us to win in these dynamic times.”
Sterling qualities like that would be advantageous even in less dynamic times, we’d venture.