The integration of the former Jarden Corp., higher input costs and adverse foreign currencies negatively affected margins during the first quarter at Newell Brands, the company that came out of Rubbermaid's merger with Jarden.
Offsetting the benefits of synergies and productivity gains, these factors caused a decline of 4.1 percentage points in the group's normalized margin from the 38.6 percent level of the year-ago period and a drop of 2.5 percentage points to 10.6 percent in the normalized operating margin.
The group's total sales rose by 148.4 percent to $3.3 billion as a result of the merger, but the growth in its core business, excluding the ski sector and other operations held up for divestiture, increased by only 2.5 percent. The normalized net income went up to $164 million from $108 million.
The management indicated that the divestiture of Völkl, K2 and ancillary brands is “in full flight,” with plans to get it completed during the current quarter. The management said that Marmot Mountain was in a growth mode and that the Coleman brand may be extended into some new categories.
These and other former properties of Jarden are now part of Newell's Play segment, whose sales of $628 million in the quarter showed a big increase from the year-ago level of $61.1 million, but with an increase of only 0.5 percent for its core businesses on a comparable, pro-forma basis. Solid growth in beverages, coolers and team sports was largely offset by substantial inventory destocking of fishing and selected Coleman products.
The normalized operating margin of the segment turned around to a positive level of 10.6 percent of sales from a negative margin of 3.4 percent in the year-ago period, when the Play segment comprised mainly the legacy Newell Rubbermaid beverages and coolers businesses.