Newell Brands (NWL), the company behind Sharpie markers, Graco car seats, Coleman coolers, and Rubbermaid containers, watched its stock lose about 74% of its value over the last five years.Then on Friday, July 31, the maker of those household staples did something it had not done in over four years. It grew.Newell reported its first year-over-year increase in both net sales and core sales since 2021, and investors responded quickly. The stock jumped about 15% to trade near $5.90.For a name that many analysts had written off as a value trap, the second-quarter report changed the conversation.What drove the Newell Brands earnings beat and stock surgeAccording to Benzinga, Newell posted second-quarter net sales of $1.994 billion, up 3% from a year earlier and ahead of the roughly $1.978 billion analysts expected. Core sales also rose 2.3%.Adjusted earnings landed at 42 cents per share, more than double the consensus estimate of about 19 cents.A large part of that growth came from tariff relief. Newell recorded about $126 millionin pretax recoveries tied to IEEPA tariffs it had paid, which added roughly 21 cents per share, Yahoo Finance reported. Remove that one-time benefit and underlying earnings came in near 21 cents, still above management’s earlier guidance range of 16 to 19 cents.
Newell Brands owns household names including Sharpie, Rubbermaid, Graco, and Coleman, and its second-quarter turnaround surprised a skeptical Wall Street.SOPA Images / Getty Images
Why the Newell turnaround isn’t just luckA single tariff refund does not fix a struggling company. What gave the quarter weight was where the growth came from.CEO Chris Peterson said five of Newell’s six business units posted core sales growth, and the U.S., its largest market, grew about 5%. He called it the first domestic growth since the pandemic era.The Learning & Development segment led the way, with core sales up 4.9% and net sales rising to $851 million from $809 million a year earlier.That growth traced back to product launches. More Consumer Brand Coverage:Major burger dining chain closes more locationsIconic candy chain closes flagship store because of labor issuesSamsung Galaxy S27 leak hints at pricier retail betNewell said it gained U.S. market share in four of its best-known brands: Graco, Sharpie, Expo, and Coleman. New product launches and wider retail distribution helped drive that gain.Gross margin also rose to 40.7% from 35.4% a year earlier, meaning the recovery showed up in the company’s profitability, not just in sales.How Newell’s updated 2026 guidance stacks up against Wall StreetNewell’s management did more than report a good quarter. It raised expectations for the rest of the year.The company raised its full-year adjusted earnings outlook to a range of 73 to 77 cents per share, up sharply from its prior 56 to 60 cents, Benzinga reported. That new range sits well above the 58-cent consensus.Here is how the revised outlook compares.Newell Brands 2026 outlook, old versus newAdjusted EPS: Raised to $0.73 to $0.77 from $0.56 to $0.60 (consensus near $0.58)Net sales growth: Raised to 1% to 2% from flat to 2%Full-year revenue: Raised to $7.276 billion to $7.348 billionFor the third quarter, Newell guided to earnings of 18 to 20 cents per share on revenue of $1.842 billion to $1.860 billion. Both figures came in around or above what analysts had expected.Why NWL stock jumped so hard on the reportPart of the July 31 move stemmed from how negative Wall Street had turned on the stock.Short sellers had piled into Newell, with short interest standing at 21.65% of the float, according to Benzinga. That means roughly one in five available shares was being bet against.Related: Verizon hits a snag in attracting customers to a key serviceWhen the earnings beat came in, many of those short sellers had to buy shares back fast to cover their bets. That buying pressure added extra fuel to the rally.Valuation also played a role. Newell shares had been trading at a price-to-sales ratio of about 0.2, far below what most consumer goods companies command. Years of decline had priced the stock like a company that was never coming back.Newell also gave itself more room to operate. It entered a new $800 million asset-based revolving credit facility that pushes general debt maturities out to 2031, Yahoo Finance noted. That refinancing matters because Newell still carries $5.0 billion in total debt against $209 million in cash.What could still go wrong for Newell Brands investorsThe quarter was strong, but the risks that made NWL cheap have not disappeared.Inflation is the clearest one. Newell now expects about $200 millionin inflationary costs this year, double its earlier $100 million estimate.Tariffs remain a headwind as well. The company projects a $127 million net tariff cost for 2026, separate from the refunds that boosted this quarter.Demand is still slow. Consumer and retail volumes remain weak globally, and major retailers are keeping inventory tight, which limits how fast Newell can grow.The earnings beat raises one big question. A large share of it came from a one-time tariff recovery, not from the underlying business. So the real test is simple: Can Newell keep expanding margins in future quarters without that refund propping up the numbers?How Newell stock compares to the market this yearFor all the damage of recent years, 2026 has treated Newell shareholders better than the broad market.The stock is up about 59% year to date, a sharp reversal from its long decline. In comparison, the S&P 500 has posted a more modest single-digit gain over the same stretch.That gap shows how much of Newell’s move is a recovery from deeply depressed levels rather than proof the business has fully healed.What Newell Brands investors should watch nextOne quarter, even a strong one, does not settle the debate over whether Newell is a bargain or a lingering value trap.For current holders, the signals worth tracking are simple: Whether U.S. sales growth holdsWhether margins expand without tariff refundsWhether management chips away at that $5 billion debt loadFor anyone considering a new position, the raised guidance offers a clearer target than the company has given in years, but the stock’s low price still reflects real risk.Newell has finally shown it can grow again. The next few quarters will show whether it can keep doing so on its own strength.Related: Ford set to challenge Tesla after big new deal with tech giant