Good morning, and welcome to the Newell Brands Inc. Fourth Quarter and Full Year 2024 Earnings conference call. At this time, all participants are in a listen-only mode. After a brief introduction, we will open the call for questions. In order to stay within the time scheduled for the call, please limit yourself to one question during the Q&A session. Today's conference call is being recorded. A live webcast of this call is available at ir.newellbrands.com. I would now turn the call over to Joanne Freiberger, SVP, Investor Relations, and Chief Communications Officer. Ms. Freiberger, you may begin.

Thank you. Good morning, everyone, and welcome to Newell Brands Inc.'s fourth quarter and full year 2024 earnings call. On the call with me today are Chris Peterson, our President and CEO, and Mark Erceg, our CFO. Before we begin, I'd like to inform you that during today's call, we will be making forward-looking statements which involve risks and uncertainties. Actual results and outcomes may differ materially, and we undertake no obligation to update or revise any forward-looking statements. I refer you to the cautionary language and risk factors available in our earnings release, our Form 10-K, Form 10-Q, and other SEC filings available on our Investor Relations website for a further discussion of the factors affecting forward-looking statements. Please also recognize that today's remarks will refer to certain non-GAAP financial measures, including those referred to as normalized measures. We believe that these non-GAAP measures are useful to investors, although they should not be considered superior to the measures presented in accordance with GAAP. Explanations of these non-GAAP measures are available, and reconciled measures can be found in today's earnings release and tables that were furnished to the SEC. Thank you. And with that, I'll turn the call over to Chris.

Thank you, Joanne. Good morning, everyone. During our call this morning, we would like to do several things. First, we will walk you through the substantial and impressive progress we made against our 2024 business and financial priorities, which was driven by the disciplined implementation of our new corporate strategy, operating model, and culture transformation. Second, we'll provide some additional perspective on tariffs and how we're approaching both the challenges and opportunities they present to us. Third, we'll share our business and financial priorities for 2025. Finally, after my prepared remarks, Mark will provide additional perspective on our 2024 fourth quarter and full year results and share our preliminary financial guidance for 2025. Let's start with an update on how we performed against the five key business and financial priorities we established at the start of 2024. As we look back on the year, we believe we have successfully delivered against our top priority, which was to fully operationalize our new strategy and operating model while strengthening our culture. At this point, our strategy has been rolled out to all business segments, regions, brands, and functions. We have fully implemented our new operating model with brand management in place for our top 25 brands, one new geographic go-to-market organization in place, and all supply chain and back-office functions centralized and largely integrated. We have upgraded talent in key roles and strengthened our culture, which is focused on high performance, innovation, and inclusion. Doing so has allowed us to make significant progress toward unlocking the full potential of the organization and our portfolio of leading brands. Although we still have work to do, the new strategy, operating model changes, and cultural transformation are clearly yielding positive results as evidenced by the fact that we reported another strong quarter with all key financial metrics in line or above our guidance range. Improving top-line performance was a key objective for 2024. And against that goal, we made noteworthy progress. Fourth quarter and full year core sales growth was in line with our expectation with sequential improvement in the second half versus the first half of 2024. Importantly, core sales trends improved across all six business units with three turning positive for the year as innovation drove annual core sales growth in the baby, writing, and commercial businesses. In fact, both the learning and development segment and our international business as a whole have positive core sales growth in all quarters of 2024, which we believe is solid evidence that our one new operating model is working. While we are pleased with the strong progress in 2024, we are not satisfied with a 3.4% core sales decline for the company even as we continued to experience category contraction. We remain laser-focused on returning the company to sustainable and profitable growth and more broad-based share gains and that is precisely why we have been moving swiftly. Dramatically improving the structural economics of our business was our third top priority. And there we drove exceptionally strong gross and operating margin improvement. Normalized gross margin improved sequentially each quarter and increased 460 basis points to 34.1% for the full year compared with 2023. Outstanding productivity, pricing, and product mix delivered the highest full-year normalized gross margin reported since 2018. Normalized operating margin of 8.2% improved by 210 basis points, which was driven by improved gross margin and was partially offset by higher A&P spend, incentive compensation, and wage inflation. Since introducing our new corporate strategy in June 2023, we have reported six consecutive quarters of year-over-year gross margin improvement and five consecutive quarters of year-over-year operating margin improvement. Newell's strong margin performance helped drive substantial progress across our fourth key priority for 2024, which was improving cash flow and strengthening our balance sheet. Strong double-digit normalized EBITDA growth and an eight-day improvement in our cash conversion cycle generated nearly $500 million of operating cash flow which in turn allowed us to reduce debt and delever the balance sheet by nearly one full turn. Allowing us to end the year with a leverage ratio of 4.9 times. Our last stated goal for 2024 was to reduce complexity through business process redesign with a focus on simplification and accountability, technology standardization and enablement, and continued SKU count reduction. Consistent with this objective, we further consolidated our ERP environment, eliminated 35 legal entities, reduced brands from 80 to about 55, rationalized almost 2,000 additional SKUs bringing us below 20,000 versus over 100,000 in 2018, and we reduced the supply base by 25% over the past two years. Notably, we also reduced the number of distributors across Latin America, Europe, and Asia by 33% last year and finally, we dramatically exceeded our weighted forecast accuracy target helped us achieve a 95% global fill rate, the highest in Newell's history. Now let's shift to the elephant in the room, which, of course, is tariffs. As we've discussed previously, Newell has been actively pursuing a tariff mitigation strategy for some time, which we discussed at length during our second quarter earnings call, and which we believe leaves us better positioned than most to navigate both the challenges and opportunities being presented by recent announcements. As a reminder, we manufacture about half of our products and source the remainder. For the last few years, we have been primarily working to reduce our dependence on China sourcing. We began accelerating our efforts about a year ago and we are continuing to pursue the following actions. First, where economically feasible, we insourced production from China, and invested in Newell's existing manufacturing network. We've already completed multiple insourcing projects including both finished goods and raw material components in the writing, baby, and home businesses. Second, we have been shifting production out of China and into alternate geographies through both existing and new suppliers, which we have been actively qualifying for major purchase tools. At this point, we have evaluated suppliers that do not have existing or defined plans already in place to establish manufacturing capabilities outside of China. As a result, finished goods that Newell imports from China to the United States now only account for about 15% of the company's total cost of goods sold, including a large portion of baby products that are currently exempt from 301 tariffs. To provide relief for young families. Importantly, based on the work already in progress, we are on track for this exposure to imports from China to be less than 10% by the end of this year. With respect to Mexico and Canada, we are monitoring the situation closely. Imports from Mexico to the US represent about 5% of Newell's total cost of goods sold, while imports from Canada are negligible. While we recognize this will likely be an area of ongoing uncertainty, we also believe it can be a potential source of competitive advantage. For example, there are several categories where competitors continue to source from China while Newell has significant US manufacturing capability. Including writing, coolers, food storage, and candles, to name a few. Our strategic shift in 2023 to a one new supply chain model and continued investment in Newell's expanded US manufacturing footprint, positions us to be competitively advantaged in certain product categories and we are currently having active dialogue with several strategic retailers to ensure they are aware of our strong US manufacturing footprint, which has some additional capacity, which can be quickly brought online on a first-come, first-served basis. Turning to 2025, we expect the macroeconomic backdrop to be dynamic. Lower-income consumers remain under pressure from the cumulative impact of inflation over the last several years. The recent substantial appreciation of the US dollar along with evolving tax policies and potential tariffs and trade regulations in the U.S. contribute to a fluid and complex operating environment. Within this context, we plan to drive continued strong progress on the turnaround agenda and have established five major priorities for 2025. First and foremost, our goal is to return the company to top-line growth through continued execution of the corporate strategy, with emphasis on product and commercial innovation, distribution expansion, and international growth. On the innovation front, we are launching and investing across the business. I'll share a few examples of these with you today. In the baby business, we launched the Graco SmartSense soothing bassinet and swing, which detects and responds to babies' cries in seconds with soothing sound and motion in the second half of 2024. The product is off to a strong start and we plan to expand distribution and fully support it throughout 2025. Just last month, Graco launched the new Easy Turn 360 two-in-one rotating convertible car seat that will help parents easily get their little one in and out of the car. The seat features a 360-degree one-hand turn and has a slim design to save precious space in the car. In our writing business, building on the successful first year of Sharpie Creative Markers, we are excited to expand the line with twelve new turntone colors and a new fine tip for enhanced precision and outlining. These new products also provide the vibrant paint-like ink and the control of a marker that consumers love. Our research confirms that creative enthusiasts are eager for even more color variety, and this expansion delivers exactly that, offering new ways to blend, layer, and express creativity. Another important writing business innovation launch will be with Expo, the leader in presentation markers. We developed a proprietary ink designed to enhance vibrancy and color on Expo dry erase markers. This new ink improves readability from across classrooms and conference rooms while expanding usability beyond traditional whiteboards to glass, plastic, and other clear surfaces. In addition, we are launching a new wet erase liner under the brand that creates a whole new segment of semi-permanent markers. Rubbermaid Commercial Products will be launching the first of several new Brut farm products, a line of animal feeders that are extremely durable and easy to clean. Importantly, this product line is based on significant front-end consumer research as our team spent time talking to and visiting hundreds of farmers over eighteen months and incorporated this insight into the product development. These animal feeders have a market-leading ten-year warranty and are made in the USA. Our kitchen business launched the Oster Extreme Mix Professional Blender with first-to-market patented titanium-coated blades. This lab-tested powerful 1600-watt high-performance motor and reversible motor technology unique to the Oster brand processes even the toughest ingredients in a matter of seconds. Oster Extreme Mix will be available in both the US and Mexico. Later this year, the kitchen business will launch Rubbermaid EasyStore food storage, which builds on years of consumer feedback to deliver a durable and easy-to-use solution that stacks simply and is built to store your way. This product will offer a secure grip lid that opens with ease yet seals securely and comes in several shapes and sizes to efficiently store all of your leftovers. In our home fragrance business, this is an exciting year for Yankee Candle. As we continue to innovate and elevate our brand. First, we are revitalizing our core portfolio with the Yankee Candle relaunch, introducing a soy wax blend for a cleaner burn and an even better fragrance experience for our consumers. These year-round favorite fragrances are still housed in our iconic Apothecary Jar vessel now enhanced with beautiful new label designs that further reinforce our fragrance-first strategy in home fragrance. We are also introducing Yankee Candle Premium, a sophisticated new line designed to attract a younger consumer in our aesthetic admirer segment. We know this consumer is willing to pay more for high-quality products, and this collection delivers featuring custom glass vessels with artisanal watercolor graphics, proprietary soy wax blend, and seven new fragrances designed by master perfumers. Within the outdoor and recreation segments, main product innovations are targeted for 2026. We have some 2025 commercial initiatives with exciting influencers, namely Ali Love, renowned fitness expert for Contigo Brands, and country music sensation, Kane Brown for Coleman Brands. These are just a few examples of the increased innovative product launches for 2025 that we expect to drive our first priority of returning the company to top-line growth during the back half of this year. The second 2025 priority is to drive operating margin improvement well ahead of our evergreen financial model which calls for a 50 basis point improvement each year. Building on the meaningful gains achieved in 2024, we expect the continuation of our fuel cost savings program and other cost savings initiatives to more than offset the impact of inflation, and the increase in A&P we have planned to support our innovation program. Third, continue to delever the balance sheet and improve the cash conversion cycle. Within this, we are planning to fully fund all the necessary high-return capability improvement and restructuring projects to build a multiyear productivity improvement runway. Fourth, drive operational excellence via complexity reduction, technology standardization and enablement, and continued SKU count optimization. And lastly, advance our transformation into a high-performance, innovative, and inclusive culture exemplifying our values, leadership, passion for winning, integrity, ownership, and teamwork. In summary, during 2024 amidst a challenging operating environment with contracting categories, foreign exchange headwinds, and continued inflation we delivered significant year-over-year sales performance improvement as we strengthened the company's front-end selling and marketing capabilities, drove very strong gross and operating margin improvement, while purposely increasing our level of A&P investment, and we meaningfully delevered the balance sheet through both debt reduction and EBITDA growth. While much work remains and the macroeconomic backdrop is still uncertain, we are laser-focused on returning the company to sustainable top-line growth, continuing to drive above algorithm operating margin improvement, and strengthening the balance sheet. Finally, I want to recognize and thank our incredible team for their hard work and dedication in delivering our 2024 goals. Their contributions have been pivotal to our success, and we deeply appreciate the commitment, grit, and passion they bring to Newell Brands Inc. every day. The measurable progress on our strategy and turnaround agenda enhances our confidence that we are taking the right actions to strengthen the organization, improve its financial performance, and create value for our shareholders. With that, I'll now hand the call over to Mark.

Thanks, Chris. Good morning, everyone. As Chris indicated, we believe that Newell Brands Inc.'s new corporate strategy is driving positive momentum and laying a strong foundation for continued growth. Consistent with this, fourth quarter core sales were minus 3% with pricing in international markets being a meaningful contributor to Q4 core sales performance. While we will not be satisfied until we are consistently growing core sales, we were still encouraged by this result for two reasons: beyond the ones Chris already cited in his prepared remarks. First, it was comfortably within our guidance range, which shows our ability to accurately forecast the business continues to improve. Second, this brought Newell's 2024 back half core sales rate to minus 2.3%, which represents another half-year sequential improvement in top-line core sales trends. Recall that during the first half of 2023, immediately preceding the development and adoption of our new corporate strategy, Newell's core sales run rate was minus 14.7%. In the three halves since that time, namely the second half of 2023, the first half of 2024, and now the second half of 2024, core sales have been minus 9.3%, minus 4.5%, and minus 2.3%, respectively, which we believe represents good progress in Newell's turnaround story. Net sales in the fourth quarter included a 2.6% currency headwind and about half a point of category exits, divestitures, and store closures. Turning to gross margin, Q4 represented another quarter of significant expansion. Normalized gross margin expanded 350 basis points to 34.6%, which represented our sixth consecutive quarter of year-over-year improvement. Productivity savings and positive pricing more than offset headwinds from lower sales volume, inflation, and foreign exchange. Importantly, on a two-year stacked basis, fourth quarter normalized gross margin was up 800 basis points which we believe is clear evidence that the transformation of Newell's structural economics envisioned six quarters ago when our corporate turnaround was initiated is proceeding at pace. During the fourth quarter, Newell's normalized operating margin rose 70 basis points compared to the previous year reaching 7.1%. The increase versus last year was due to higher gross margin and ongoing organizational restructuring-related savings, which were partially offset by a nearly 20% increase year-over-year A&P investments in dollar terms and higher incentive compensation costs. Net interest expense of $72 million represented an increase of $2 million from the prior year period and a normalized tax benefit of $4 million was recorded in Q4. Q4 normalized diluted earnings per share came in at 16 cents, which was above our guidance range of $0.11 to $0.14. Before moving to the 2025 preliminary outlook, there are just a few things in the full year 2024 financial results we'd like to comment on, the first of which is gross margin. Since the Jarden acquisition in 2016, Newell Brands Inc.'s normalized gross margin has declined every year up to and including last year when normalized gross margin dropped from 30.2% in 2022 to 29.5% in 2023. However, during 2024, normalized gross margin positively inflected in a dramatic way. Expanding by 460 basis points to 34.1% allowing Newell Brands Inc. to quickly regain multiple years of gross margin loss. The sharp reversal in normalized gross margin made possible by the development and implementation of a highly focused and compelling corporate strategy that was underpinned by a comprehensive capability assessment with clearly delineated where to play and how to win choices, which among other things call for the prioritization of top brands and top countries, targeted pricing actions, active-based business mix management, and the development of consumer-driven MPP and HPP product innovations. These actions, when coupled with another year of world-class productivity efforts by our supply chain and procurement experts with the catalyst that sparked Newell's gross margin recovery and provides a clear roadmap for continued margin expansion. Another area that warrants mentioning is 2024 full-year operating cash flow results. Newell generated $496 million of operating cash flow in 2024, which was driven in part by an eight-day improvement in our year-over-year cash conversion cycle. The nearly $500 million of operating cash flow was fractionally below the guidance range provided during the third quarter earnings call due to a proactive decision to temporarily increase inventory levels in anticipation of a potential port strike, which fortunately was averted. Strong operating cash flow provided the funds necessary to reduce net debt. A $175 million reduction in net debt in conjunction with a 15% increase in our full-year normalized EBITDA dropped Newell's leverage ratio by nearly one full turn to 4.9 times at year-end. The last thing to touch on prior to discussing 2025's preliminary outlook is the debt refinancing transacted during the fourth quarter. Specifically, $1.25 billion of upcoming maturities were refinanced to two new tranches, $750 million due in 2030 and $500 million due in 2032. The offering was six times oversubscribed, allowing us to capture an attractive all-in blended rate below 6.5%. Out of the original $2 billion of debt, which was maturing in April of 2026, $1.25 billion is still outstanding. Our intention is to refinance that balance at some point during 2025 likely in two new roughly equally sized tranches maturing in 2031 and 2033 respectively. Would take advantage of two open rungs on our debt maturity ladder and leave us with a very logical and we believe manageable debt horizon. Typically during our fourth quarter earnings call, we provide a 2025 outlook which we will once again do today. But this time with an important caveat. Namely, the discussion which follows is best characterized as being a preliminary 2025 outlook. This is because Newell Brands Inc. has a large global geographic footprint across which we purchase, manufacture, and sell billions of dollars worth of raw materials, component parts, and finished goods. As such, we are subject to direct impacts from changes in global trade policy and tariffs and any associated second or third derivative effects, such as currency movements or shifts in consumer purchasing behavior, which would be exceedingly difficult, if not impossible, to accurately predict. Therefore, we have chosen to provide preliminary 2025 guidance without including any impact from the recently announced 25% tariffs against Mexico and Canada, which were postponed for 30 days to allow for further negotiations, or the 10% tariff enacted against China earlier this week. As trade policy decisions come into view and solidify throughout the year, updates will be provided as appropriate. With that understanding, we expect the following for 2025. Core sales are expected to be between minus 2% and plus 1%. Since we continue to measure our progress in halves instead of quarters, we expect sequential improvement with the first half being down low single digits and the back half turning slightly positive. Within this core sales range of approximately one point of low margin business, or residual tails of non-strategic brands we've chosen to proactively walk away from. Net sales are expected to decline between 4% and 2% with an anticipated 2% to 4% headwind from unfavorable foreign exchange and business exits. Importantly, we expect both learning and development and international to have a second consecutive year of core sales growth home and commercial to return to core sales growth in the back half of the year. We expect outdoor and recreation to improve in 2025 but a return to core sales growth is unlikely until 2026, when several key innovations are expected to launch. This outlook assumes that Newell's categories improve from a low single-digit decline in 2024 to essentially flat in 2025. We also believe retailers will continue to manage inventory tightly in durable and discretionary categories. But that said, this should not cause any meaningful destocking or restocking during the year. We expect normalized operating margin between 9% and 9.5%, which at the midpoint represents roughly a 110 basis point improvement from 2024 and is more than double our evergreen target of a 50 basis point improvement each year. The increase in normalized operating margin should be driven by higher gross margin and lower SG&A costs. Within SG&A, overhead costs should be down in 2025, both in dollar terms and as a percentage of sales. But we are once again planning to invest more A&P to both absolute dollar terms and as a percentage of sales. The intention to support higher levels of A&P in 2025 versus 2024 should be interpreted as confidence that more investable opportunities are now at our disposal because the structural economics of the base business are considerably better and a stronger innovation funnel is starting to come online. Interest expense in 2025 is projected to step up by somewhere between $5 and $10 million and Newell's effective tax rate is being planned in the low and mid-teens. Please note that this compares to a normalized tax provision of $21 million in 2024. All in, we expect normalized diluted earnings per share in the range of $0.70 to $0.76, at the midpoint of this range and on a tax-equivalent basis this represents an 18% increase versus 2024. For the year, we expect to generate operating cash flow of $450 million to $500 million which assumes a high single-digit days reduction in Newell's cash conversion cycle. During fiscal 2025, we plan to invest between $250 million most of which will be spent on either high-return cost savings projects or to support upcoming consumer product innovations the providers of which will be an MPP or HPP propositions. Putting all this together and combining projected cash flow and EBITDA growth, should translate into a year-end 2025 leverage ratio of about 4.5 times, which is roughly one-half turn better than where it sits today and moves us closer to our longer-term ambition of being an investment-grade debt issuer. As it relates to the first quarter of 2025, expect a store core sales decline of 4% to 2% with net sales down 8% to 5%. Please note that foreign exchange into a lesser extent category exits and divestitures accounts for the relatively large difference between core net sales in the first quarter. Normalized operating margin in Q1 of 2025, which is typically Newell's smallest quarter of the year due to seasonality, and as a result is generally not indicative of full-year margin trends, is expected to be between 2% and 4%. Gross margin productivity should remain strong, but the recent material strengthening of the U.S. Dollar has created a significant foreign exchange transaction headwind. We are in the process of taking appropriate pricing actions to offset this impact which should more than counteract this headwind over the remaining three quarters of the year, but first-quarter operating margins will be negatively impacted. Finally, we expect a small year-over-year increase in interest expense, a slightly normalized tax benefit, a normalized loss of $0.09 to $0.06 per share in Q1. In closing, we are excited by the results Newell Brands Inc.'s highly dedicated and skilled employees delivered in 2024. And are eager to build upon the strong foundation our new strategy subsequent results have established. We will also stay agile and connected as U.S. economic policy unfolds to take advantage of opportunities for growth while minimizing potential negative impacts.

Thank you. Ladies and gentlemen, if you have a question or comment at this time, please press star one one on your telephone. If your question has been answered, you must remove yourself from the queue, please press star one one again. We'll pause for a moment while we compile our Q&A roster.

Thanks. Good morning. I guess, focus on organic or core sales growth for 2025. And just trying to understand your assumptions of the category growth, you know, and across the board would you expect them to be growing and you're growing with them? Or is this where you think you can actually get market share gain? And kind of the same question for outdoor and recreation. Yeah. I mean, I understand that their new products and innovation not coming till 2026, but is this just a you can't maintain share until those products come? Or, you know, is there any way that that business could actually be flat this year? Just trying after two, three years of declines, you would think it flattens out at some point.

Thanks, Bill. Let me try to take those in turn. So I think from a core sales guidance, we guided the year minus 2% to plus 1% on core sales for 2025, which is a significant sequential improvement from this year. And I think as we said in the prepared remarks, we expect the first half of the year to be down low single digits, and we expect the company to return to positive core sales growth in the back half of the year. If you look within that, we're sort of projecting the categories from everything we can see to be about flat. The other important point that Mark mentioned is there's still about a point of business headwind that our businesses that we proactively chosen to walk away from. That are a headwind within core sales that we have not excluded if you were to exclude that point of headwind of businesses that are sort of tail businesses that we discontinued, our core sales guidance excluding that would be minus 1% to plus 2% for the year. Is I think another important point because that one-point headwind is sort of one-time in nature. We don't expect that as we go into 2026. Relative to the business units, learning and development has returned to core sales growth. That's important because it's our largest most our largest profit segment. We've delivered core sales growth in that segment all four quarters of this year, and we expect that segment to deliver core sales growth in 2025. The international business also has delivered core sales growth every quarter of 2024 and we expect that to continue in 2025. I think the big thing is with the innovation pipeline, ramping up, and I mentioned a number of the initiatives in my prepared remarks, we're expecting home and commercial to move into positive territory as a segment the back half of the year. And then I think on outdoor and recreation to your point, outdoor and recreation is our smallest segment that represents only about 10% of the company's revenue. And less than that of the company's profit. On that business, we expect core sales trends to improve sequentially in 2025 versus 2024. But because the innovation pipeline, as we've said for several quarters now, doesn't really hit until the 2026 season, we're in active discussions right now with all of the major retailers selling in those products for the 2026 season. We think that that business is unlikely to turn positive on core sales this year, although we do think that it is going to sequentially improve. But we do think that we are lined up to have that business turn positive in 2026.

Okay. Thanks for the color. And then, Mark, just looking at interest expense I guess, trying to understand what's factored in for this year. You said $5 to $10 million increase, but that's before the next refinancing. So is that partially baked into that guidance or that would be incremental interest expense?

What I would tell you is a couple of things. So if you look at our year-over-year interest expense, while we had a very successful refinancing endeavor, some of that debt that we were pulling down the $2 billion that was sitting out in April of 2026, was initially coupon at 4.2%, but because of step-ups, it was actually effect yielding 5.7%. So when we refinanced, obviously, you saw a bit of a step up on that, and that's gonna carry over for the full year. Now we are actually very excited because the 2030s and the 2032s that we issued at 6.375% and 6.65% respectively, you take the midpoint of the bid ask on both of those, the shorter duration is actually trading 35 basis points better, the longer duration is actually trading 25 basis points better. So obviously, I think people are looking through the business results and seeing the turnaround that's underway and feel very good that the credit metrics are improving at Newell. And so obviously, when we reenter the market to dispose of the remaining $1.25 billion of the April 2026 notes, we expect to be able to do that at attractive rates. As far as the other piece of your question, our guidance incorporates the projected refinancing about midyear. So we've already factored that into the guidance. That's not an incremental headwind that we would expect.

One moment for our next question. Our next question comes from Lauren Lieberman with Barclays. Your line is open.

Great. Thanks. Good morning. Was curious because I know on tariffs, you guys were, you know, proactive in offering and kind of framing exposures or lack thereof, and there was nothing inconsistent with what you guys have shared before, but thanks for, you know, just laying it all out. I was curious if maybe hard to say, but would you think that ultimately over a twelve to twenty-four month period of tariffs go in, is it a net positive or a net negative for you? Because I think the competitive dynamics situation in the US where this would favor you is something that's probably pretty underappreciated. So it's just Yeah. Thanks.

You know, it's Lauren, it's a good question. And it's one that we spend a lot of time as a leadership team talking about. There's and it's hard to predict. What I will say is there is reason to believe that it could be a net positive for us over the midterm because we have a very significant US manufacturing base that we believe is competitively advantaged. And many of the categories that we're competing against, you know, if you think about half of our business is manufactured, and the biggest part of our US business we manufacture in the US. And we compete against a number of players that are not manufacturing in the US. We've already started to get a little bit of traction in the back half of the year. We haven't really fully baked this in yet. Around going out and talking to retailers about shifting their promotion slots to made in the USA product as a way to insulate the retailer assortments from tariff potential. We've also talked to retailers about changing their shelf sets to favor made in the USA product and discontinuing some of their particularly on some of the categories where they're bringing private label in from China we think they should shift and discontinue that product and put our brands in place. I'm selling a little bit on that. As we have those discussions, but we're getting some traction and that traction is increasing. And so that will be a tailwind for us. On the flip side, as we've mentioned, there is some headwind that we, you know, that we can face from China tariffs, from Mexico, and Canada potentially retaliatory tariffs. And so how that fully messes out is just very difficult to predict, which is why we when we gave our guidance, we said it was preliminary. But I do think we've got a lot of opportunity in this environment because of the US manufacturing base and you know, one of the things that we went back and looked at was if you look at what's happened, in the new US manufacturing base, since 2017, since the 2017 tax cut initiative was put into place. Newell's invested close to $2 billion in US manufacturing. And we think that that is sort of unique. Relative to our competitive set. And so we're trying to figure out how do we leverage how do we scale up. We can hire more workers in as we scale up those US manufacturing plants, that comes at a very high incremental profit rate as well. Because it carries fixed overhead. So it's a long way of saying we don't really know because it's hard to predict where what the outcome is. But we do have an underappreciated to your point positive tailwind from our US manufacturing, and the question will be how does that compare to the headwind potential from tariffs on the sourced business? That we may be facing.

Okay. Great. And let me just one more thing, and I apologize if I missed this in the prepared remarks, from Mark. But Q1 core sales just wide we we knew we'd a had anticipated, and I know it's a really small quarter. So I just wanted to know if there was more clarity on the driver of that one Q. For sales.

I think on Q1, and you rightly pointed out, Q1 is always our smallest quarter of the year because we have a number of seasonal businesses and it's the smallest season on every single one of our businesses. And so I don't read too much into Q1 as an indicator of where we're headed the year. You know, if you looked at Q1 this year versus Q1 last year, where our guidance, although it's minus 2% to minus 4% this year, would be an improvement versus even at the low end, versus how we started last year. And so you know, that's what I would say about Q1.

Yeah. The only other thing I would offer on Q1 is the fact that there's very little innovation that typically across our categories gets launched in the quarter. You know, we feel really good that our innovation funnel is gonna continuing to build out. And in fact, our 2025 tier one and two innovation funnel in terms of something we call DRAC, which is gross revenue after cannibalization, is actually three times the size of our 2024 funnel. So we've been building that and capability, and that'll be coming online. The other thing I'll say about Q1 is obviously the normalized EPS guidance in minus $0.09 to minus $0.06 might have caught people a little bit by surprise, but there's a big currency dislocation taking effect. As we sit here now based on the tariff discussion that it then? Obviously, you're right public. And if you look into our Q1 there's probably about almost nearly a nickel of transaction impact on EPS in the quarter, which we are taking, you know, action very confident that we will do so. And if you look at our full-year EPS guidance at the midpoint, we're projecting to be up 18%. So we feel really very good about the plan. We think the company is continuing to put strength after strength. And so this is just a temporal thing.

Okay. Yeah. Maybe one other thought on that. Just Mark makes a good point. If you go through that list of innovation that I went through in my prepared remarks, the vast majority, not all, but the vast majority of that innovation is launching sort of in the season, so this summer. And that innovation, we think, based on the feedback we've heard from retailers, is gonna be very well received in the market. So it's what gives us confidence that we're gonna return to sales growth in the back half of the year. And we continue to make, you know, difficult choices on low margin business. Chris said that for the full year, there's about a point in there. I would contend that that's much more heavily weighted towards the front end of the year than the back end of the year. And if you look at the trade-off that we've been making there, I think it's a fair trade. Right? Because our two-year stack on our normalized gross margin in the fourth quarter was up 790 basis points. And the, you know, second half two-year stack was up 700. So that's a trade that I think is more than reasonable for us to be making. I mean, our 2024 net sales were $550 million less than 2023. But our trailing twelve-month adjusted EBITDA up $120 million.

One moment for our next question. Our next question comes from Chris Carey with Wells Fargo Securities. Your line is open.

Hey. Good morning, everyone. I just wanted to follow-up on that line of thinking actually. You know, Newell's been divesting and shedding businesses for some time even before the Jarden acquisition, but obviously, it accelerated. You know, and it continues to today. Obviously, there are gross margin benefits. Is this just going to be something that is this gonna be a part of the story on an annual basis and there's gonna constantly be, you know, some revenue headwind and a gross margin offset. You know, how close do we how how close are we to, you know, the portfolio that, you know, we'll probably see over the longer term. I realize there's always gonna be decisions here and there, But just the durability of it, number one, and then or should we be thinking about this as, to your point, about you're gonna see better margin benefits and perhaps earnings. So does that any thoughts on the cadence of this and the durability?

Yeah. I think that dynamic that you're talking about 2025 is likely to be the end of that dynamic, and we will not have that dynamic in the same way as we head into 2026. And the reason why I say that is recall that when we started the strategy eighteen months ago, we had 80 brands. We ended the year in 2024 with 55 brands. So we've already gotten 25 out. Of those 55 brands, there's maybe, you know, five or so that we still are likely to exit that are relatively small, but that we expect to do that kind of in the first half of this year. And so we think we're gonna be at a portfolio of 50. We think that portfolio of 50 is now the right portfolio going forward, and recall that our strategy is to focus on the top 25 which represent 90% of the sales and profits of the company. But I don't think the tail cleanup is going to be as pronounced going forward. We have had that as a headwind to your point. But I think when we get into 2026, that point of headwind that we talked about that's embedded in our core sales guidance for 2025. I don't expect us to be talking about that being a headwind for 2026 as we go into 2026.

Okay. Alright. The only oh, the other question would be from a category growth perspective, how would you assess your visibility across your major categories? There are a number of categories across the consumer that are seeing sluggish growth right now. So it like, what's the rank order where you know, pretty good visibility here, but, you know, you could be, you could be exposed a little bit on the tail. And then how are you thinking about, you know, ring fencing for that exposure, just given the volatility that we've seen in category growth in recent times?

Yeah. Category growth is a little bit more of an art than a science to predict. You know, what I would say is as we started 2024, we said that we were expecting in 2024 categories to be down low single digits. And they did turn out to be down low single digits. So, you know, we hit the forecast in 2024 that we were expecting. As we head into 2025, you know, our forecast is for the category growth rate to be about flat. And when we talk about the category growth rate, we're talking about the global category growth rate, not just the US. Category growth rate. And so we use a number of different sources to try to make that projection. I think we've gotten better at looking at data sources whether it be from companies like Zircona, that issue a forecast largely for the US. Euromonitor, we look at what retailers around the world are saying. We look at macroeconomic forecasts, and then we look at history of these categories as well, and we sort of triangulate to try to get to what we think the forecast is likely to be. There are likely gonna be some puts and takes in that forecast. There'll be some geographies that we expect will grow and some categories that we expect will grow, and there'll be others where we'll see a bit of a headwind. But so far, there's nothing in our forward-looking lens that would cause us to come off of that forecast of categories improving in 2025 versus 2024 and being about flat in total.

One moment for our next question. Our next question comes from Brian Vaccine with Canaccord Genuity. Your line is open.

Hey. Good morning, guys. Thanks for taking the questions. First, I was hoping you could comment on, I guess, what I'll call your practical tariff exposure China? I know a good portion, as you mentioned, is Graco where you've had kind of waivers in the past. So assuming those waivers continue, where do you kind of see those percentages landing that, you know, the 15% current and the 10% by year-end?

Yep. So let me start with that. As you rightly point out, 15% is where we are today. We expect to be at 10% by year-end. By year-end of that 10%, the majority of that is related to the baby business. So certainly more than half of it maybe 60%, 70% of it is baby-related. That is currently exempt from 301 tariffs. Now I will say, the most recent tariff pronouncement that the government has announced of 10% applies to all China goods irrespective of exemptions or not. We'll see whether that sticks and how that applies, but that would be the exposure on China. In most cases, where we have China exposure, we are not competitively disadvantaged in a significant way because the industry is dependent on China for those categories. Is the first point. The second point is we are not exposed at all for retaliatory tariffs from China. And so there is nothing that we manufacture in the US that we import to China. We do have a China business, that's a fine writing business behind Parker and Watermen. But those products are made in Europe and sold into China. So we have sort of a one-way exposure on China that is from China into the US.

Got it. And then quickly a second question, one we get often from investors is what drives the return to core sales growth? Is it simply lapping easy comps, lack of headwinds from kind of SKU reductions in brand exits, innovation, which we've seen as a template in learning and development, or maybe something else. If you can kinda rank order those in buckets, I think that would be very helpful. Thanks.

Yeah. So if you talk about what gets us to core sales growth, number one, we expect the category, as I mentioned, to improve from down low single digit this year to about flat next year. And so category improvement is sort of one piece. Relative to the things that are in our control, we have significantly improved ramped up our new product innovation pipeline. I mentioned a number of them that we're launching. But if you look at just as a headline, in 2023, we had by our estimates, one tier one initiative that we launched. Recall that as part of our new strategy, we put a tiering system in place that's based on size and importance of the initiative. If you looked at heading into 2024, we had eight tier one initiatives that we launched in 2024. And next year, we're gonna be in the mid-teens. And so we're seeing that ramp up next year being 2025. We're seeing that ramp up in new product innovation. Mark mentioned it as well. At the gross revenue after cannibalization is significantly higher today from the new product innovation than what we would have going into 2024 or 2023. That's the second component. There's a third component which is distribution expansion. So our net distribution as best we can measure it in 2024, was negative in terms of retail distribution in physical retail stores. As best we can measure, the plan that we've got in the retail commitments for 2025, our net distribution in 2025 is going to turn positive. And so we will go from distribution being a headwind to being a tailwind as we move into 2025. Is the third piece and our sales teams are very focused on that. Because we have a significant opportunity because many of our brands, which are market-leading brands, have a share of shelf that is below their market share. And so we think there's an opportunity for retailers to drive category growth by giving us more shelf space. And we think our brands are deserving of more shelf space. And as the innovation ramps up, it gives us the leverage to go and ask for more shelf space. And then I think the next piece is we're getting sharper on mix and pricing. And so we talked about in our strategy the move from opening price point to medium and high price point. All of the innovations that we're launching are medium and high price point products. And so we believe that we're gonna start to drive price per unit up in these categories through our new product innovation, and through our mix management process. Those are the biggest elements that get us from what has been a core sales decline to core sales positive.

Right. And I could add just a couple other pieces of perspective. I think the other part of it was we just weren't spending enough money in A&P to be frank. You go back to 2022, our A&P level was 4%. We're finishing this year at 5.5%. We think we'll finish 2025 closer to 6%. Now that varies by brand. Some brands have nearly 10% of their sales being spent. Some have very low percentages like the Rubbermaid commercial business where it's not necessarily appropriate. But we haven't been investing enough in our brands and our leading brands and we didn't do enough work upfront with the consumer qualification work 360 marketing, We didn't have a lot of qualified propositions we were bringing forward that had strong claims, full influencer social media program, and that's what all the things that Chris talked about when he came on. And did the capability assessment. We had a lot of outages in our front-end capabilities and branding and marketing was one of those things. I mean, it's only been six, seven months since we actually put full brand management in place over here at Newell Brands Inc.

One moment for our next question. Our next question comes from Andrea Teixeira with JPMorgan. Your line is open.

Hi. Good morning, everyone. Thank you for the question. So Chris, Mark, how much pricing contributed to core sales in Q4? You mentioned on the release that price in international markets was a meaningful contributor, which is natural, of course. But to the total core sales, which, as we all know, declined 3%, so, therefore, it implies the volumes were negative in the mid-single digits, I'm assuming, not to say that, obviously, you know, this is what has been the case. But as we progress and obviously, we saw what you guided for the first quarter, how should, number one, we be thinking about pricing, and then two, of course, like, the offset to that in volumes. And then a secondary question is on Mexico, which is an important pillar to your international expansion as you pointed out as the five pillars of your growth going forward. Can you expand a little bit on how the recent developments, of course, potentially, like, having a recession in Mexico. Can influence your outlook. Thank you.

Yeah. So just a couple of thoughts. I would say pricing was about a point in Q4. So it was not a huge, and most of that pricing that was about a point in Q4 was in markets where we saw significant devaluation of currency. As we mentioned in Mark's prepared remarks, as we head into Q1, we are seeing significantly higher FX pressure, and so we are planning more pricing largely in international markets. That pricing is going into effect sort of toward the February, March timeline. It'll have a bigger impact on Q2 than it will on Q1, but that's sort of the pricing dynamic. Regarding Mexico, Mexico is one of our top international markets, and we are growing in Mexico. We have two manufacturing plants in Mexico that are supporting Mexico, a blender plant in Acuna and a writing plant that's in Mexicali. Which are basically the 5% of cost of goods sold that I mentioned that are coming from Mexico into the US in my prepared remarks. With regard to the Mexican business from a business sold in Mexico, I would say Mexico roughly is about 4% or 5% of the total company's revenue. And we think we've got still a significant opportunity because our market share positions in Mexico, while strong, are still not as strong as they are in the US market. And so we've got a plan we think in Mexico despite the macroeconomic environment where we think we can grow in Mexico and gain significant market share.

A couple other things I'll just throw out, just for your benefit is if you think about the net pricing that we expect in 2025, and almost all of it is driven by currency movements. We think that's probably gonna fall out maybe one third in the first half and two-thirds in the second half. But the FX impact is roughly 60/40 the other way. So again, we think the first quarter is a bit of a temporal thing. Obviously, the currency pairs broke meaningfully very recently and very suddenly. Because of our, you know, work with our trade customers. We don't go in necessarily next day and then put through a pricing action. It takes time. So we're admittedly getting scraped a little bit. But we weren't caught unaware. We were very proactive and we have plans in place and those are being implemented. So we're not overly concerned about it, and as I said in the prepared remarks, we have a good plan that we're confident will at the end of the day, drive, you know, over a hundred basis points of op margin improvement through the full year, which is, you know, 2x our evergreen target.

Thanks, operator. Good morning, everyone. So Chris, Mark, I know you both outlined various uncertainties. This is a preliminary guidance. And I totally appreciate that it's hard to predict these things. But if we were to put that aside for a second, I mean, how would you characterize the degree of flexibility in this guide? I just ask that in the context of what we've seen over the past year particularly on the operating margin front where you know, the degree of expansion you delivered this year came in about twice as strong as you expected at the start.

Yeah. I think you know, look, we're trying to be prudent in the guidance. One of the things that as Mark and I initiated the turnaround plan, eighteen months ago. You know, we want to develop a focus on delivering what we say. It doesn't mean that we're trying to be sandbaggers. We're not trying to do that. But at the same time, we're trying to tell you to provide what we think is reasonably we're reasonably confident we can deliver. And in some cases, we're gonna try to run very fast to over you know, to over-deliver. And so the work doesn't stop when the budget is done or when the guidance is given. You know, we've got internal targets that are higher than what's in our guidance. And you would expect us to have internal targets that are higher than what's in our guidance. And so but we also are not immune from macro impacts. I will say, if you look at the flexibility that's in the P&L, I feel better today than I did a year or two ago, Mark mentioned, you know, we're going into the year with a much higher A&P budget. Which we intend to spend behind our top innovations. But if we wind up through the year, seeing something happen that causes some of those innovations to be disrupted by macro forces we do have discretionary spend that's built into the budget that can allow us to still deliver. Likewise, we have upside plans that we're working on to say, if things are going better than we expect, we're gonna double down and invest more. So you know, that's sort of how we approach it. I know it's not a hard and fast answer, but we want to continue to deliver and have our teams focus on over-delivering what we're promising externally.

Yeah. I guess this is what I'd say. Look, we're not gonna, you know, provide quarter by quarter guidance on op margin. What I would say is that we feel really good about the margin work that has been done. Right? The second half of this past year of 2024 versus 2023 and 2022 shows market improvement we've made up for years of gross margin decay and decline in very, very short order. And that's because frankly, the work that's been done on gross margin is structural versus cyclical. And what I mean by that is, you know, our top line is still compressing. We've been driving inventory down and taking the capacity utilization hits that come along with that in the short term. But the underlying fuel productivity program and the automation work that we've done, the gross margin accretive innovation is still largely coming. Positive mix management, pricing, and promotion management. All those things are systemic endemic to what we're now doing routinely across the business. And there's actually no reason why, you know, when Chris and I sat out at Deutsche Bank, you know, roughly two years ago and laid out our midterm goals and saying, look, we want to get gross margin at 37% to 38%. And if we can do that and have A&P somewhere in the 6% to 7% range, and get our overheads back down where they need to go, you know, let’s say in the 17% range that we could have a margin of, you know, 13% to 15%. Versus this year, we ended up at 8%. I think we feel really good about what we've been able to deliver, you know, year over year over year. I mean, we just had $900 million twelve months. Adjusted EBITDA on this business. And as we talked earlier, sales were down, but you know, profit was up significantly. That was a trade we knew we had to make. Based on the portfolio that we had. We made it. We said that we're gonna walk towards the barking dogs and make quick swift decisions. Under Chris' leadership, that's exactly what we've done. And so I think we feel really good that we're piecing the turnaround together one piece at a time. And, you know, my confidence has never been better.

Thank you. This concludes today's conference call. Thank you for your participation. A replay of today's call will be available later today on the company's website at ir.newellbrands.com. You may now disconnect, and have a wonderful day.