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Newell Rubbermaid Updates Fiscal 2011 Financial Outlook

^{Published on 2011-06-03 05:15:39 - Market Wire}
 

ATLANTA--([ BUSINESS WIRE ])--Newell Rubbermaid (NYSE: NWL) today announced that in light of disappointing economic conditions and weak consumer spending trends in the U.S. market, the company is adopting a more conservative 2011 sales and earnings outlook.

"We continue to execute against our growth plans and we are confident that the actions wea™re taking will result in solid growth in the back half of the year, despite weak category performance in the U.S. and increased cost inflation"

aPersistent softness in the U.S. economy and increased inflationary pressure have caused us to revise our outlook for the balance of the year. We still expect solid core sales growth versus our 2010 results; however, our revised expectations are lower than they were just a short while ago,a said Mark Ketchum, President and Chief Executive Officer. aSeveral of our large retail customers are revising downward their U.S. growth expectations for the year, pointing to weak consumer confidence levels and lower-than-expected spending trends, particularly in the semi-discretionary categories in which we compete. These lowered expectations are impacting customer ordering patterns and, as a result, we think it prudent to reflect those assumptions for lower growth in our own sales projections for the year.a

Newell Rubbermaid now anticipates 2011 core sales growth in the range of three to four percent. The companya™s updated gross margin outlook is for expansion of between 40 and 60 basis points, reflecting increased cost inflation versus earlier expectations. Revised full year normalized diluted EPS growth is projected between five and ten percent (or $1.60 to $1.67). (A reconciliation to anormalizeda results is included below.) The guidance provided by the company in its April 29, 2011 first quarter earnings release comprised core sales growth of four to five percent, gross margin expansion of 50 to 75 basis points and normalized diluted earnings per share growth of ten to twelve percent. The company made no change to its guidance for 2011 operating cash flow of more than $550 million.

In connection with the revised outlook, Newell Rubbermaid believes that its second quarter performance will be lower than analystsa™ consensus expectations as reported by First Call. Normalized earnings per share could be as much as fifteen percent lower than analystsa™ current expectations.

aWe continue to execute against our growth plans and we are confident that the actions wea™re taking will result in solid growth in the back half of the year, despite weak category performance in the U.S. and increased cost inflation,a said Ketchum. aOur growth drivers, which were always skewed toward the back half of the year, include the launch of innovative new products, distribution gains at a number of key retailers, aggressive pricing actions to offset cost inflation and a greater focus on expansion in faster growing emerging markets. As a result of these actions, we continue to expect 2011 average core sales growth of four to five percent across the majority of our portfolio. A notable exception is our Baby & Parenting business, which along with the rest of the baby and juvenile category has been particularly hard hit by the trends discussed above, and continues to be a drag on the companya™s overall performance. We are focused on taking corrective actions to address the issues in this category, while maintaining the momentum across the rest of our business. Despite the lowered expectations, our revised projections for 2011 financial results reflect solid growth in core sales, gross margin and normalized EPS a" another installment on the growth trifecta.a

About Newell Rubbermaid

Newell Rubbermaid Inc., an S&P 500 company, is a global marketer of consumer and commercial products with 2010 sales of approximately $5.8 billion and a strong portfolio of brands, including Rubbermaid^®, Sharpie^®, Graco^®, Calphalon^®, Irwin^®, Lenox^®, Levolor^®, Paper Mate^®, Dymo^®, Waterman^®, Parker^®, Goody^®, and Aprica^®.

This press release and additional information about Newell Rubbermaid are available on the companya™s Web site, [ www.newellrubbermaid.com ].

Non-GAAP Financial Measures

This release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. Included in this release is a reconciliation of these non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP.

Caution Concerning Forward-Looking Statements

Statements in this press release that are not historical in nature constitute forward-looking statements. These forward-looking statements relate to information or assumptions about the effects of sales, income/(loss), earnings per share, operating income or gross margin improvements or declines, Project Acceleration, the European Transformation Plan, the Capital Structure Optimization Plan, capital and other expenditures, cash flow, dividends, restructuring and restructuring related costs, costs and cost savings, inflation or deflation, particularly with respect to commodities such as oil and resin, debt ratings, and management's plans, projections and objectives for future operations and performance. These statements are accompanied by words such as "anticipate," "expect," "project," "will," "believe," "estimate" and similar expressions. Actual results could differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause actual results to differ materially from those suggested by the forward-looking statements include, but are not limited to, our dependence on the strength of retail, commercial and industrial sectors of the economy in light of the global economic slowdown; currency fluctuations; competition with other manufacturers and distributors of consumer products; major retailers' strong bargaining power; changes in the prices of raw materials and sourced products and our ability to obtain raw materials and sourced products in a timely manner from suppliers; our ability to develop innovative new products and to develop, maintain and strengthen our end-user brands; our ability to expeditiously close facilities and move operations while managing foreign regulations and other impediments; our ability to implement successfully information technology solutions throughout our organization; our ability to improve productivity and streamline operations; changes to our credit ratings; significant increases in the funding obligations related to our pension plans due to declining asset values or otherwise; the imposition of tax liabilities greater than our provisions for such matters; the risks inherent in our foreign operations and those factors listed in Exhibit 99.1 to the companya™s most recent Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission. Changes in such assumptions or factors could produce significantly different results. The information contained in this news release is as of the date indicated. The company assumes no obligation to update any forward-looking statements contained in this news release as a result of new information or future events or developments.

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