Newell Brands' Play segment, which includes Marmot Mountain and many other outdoor and sports brands inherited from its recent merger with the former Jarden Corporation, generated net sales of $611 million in the third quarter. They were 2.4 percent higher than in the year-ago period, with growth of 2.3 percent in core businesses that have been retained by the group.
Last July 18, Newell sold Jarden's former winter sports brands including K2, Marker, Völkl and Dalbello to Kohlberg & Company for $240 million.
Higher sales were recorded in all of the segment's three businesses, with more strength in Team Sports and Fishing than in Outdoor Recreation. Together, they delivered a “normalized” operating margin of 12.8 percent of sales, up from 12.0 percent in the year-ago period. On a reported basis, the reported margin grew to 11.2 percent from 0.6 percent, largely due to cost savings, synergies and the absence of the negative impact from an inventory step-up related to the acquisition of Jarden's former assets.
Adding the results of its other segments, Newell Brands reached a normalized operating margin of 15.0 percent across the group, down from 15.4 percent in the year-ago period. The normalized gross margin went down to 35.0 percent from 36.0 percent. Net sales declined by 7.0 percent to $3.7 billion, with a negative impact of 7.7 percentage points from acquisitions and divestitures. Core sales grew by 0.4 percent.
The recent divestiture of Newell's winter sports business, comprising K2, Marker, Dalbello and other brands, contributed the most to transaction charges of $13.4 million. In spite of them, reported net income rose to $234 million from $187 million. On a normalized basis, it went up to $421 million from $377 million.
The management is predicting growth of between 1.5 percent and 2.0 percent on a pro forma, adjusted basis for the full financial year.