Moody’s Ratings has revised Newell Brands Inc.’s outlook to stable from negative while reaffirming the company’s B1 Corporate Family Rating and related debt ratings. In the same action, the ratings agency assigned a B2 rating to a proposed $500 million offering of senior unsecured notes due 2031, which Newell intends to use to redeem in full its outstanding $500 million notes that mature in 2027.
Moody’s cited Newell’s stronger operating performance in the quarter ended June 30, 2026, as a primary reason for the outlook upgrade. The agency noted expectations that recent gains in market share and distribution, together with a product mix shift toward higher-margin premium items, will underpin earnings growth over the coming 12-18 months despite a challenging consumer backdrop.
The company’s recent free cash flow generation and stated commitment to lowering leverage were also highlighted by Moody’s as factors that should support improving credit metrics, which it characterized as currently stretched for the existing rating.
On the top line, Newell returned to year-over-year revenue growth in the second quarter of fiscal 2026 for the first time in four years. Reported sales rose 3.0% year-over-year while core sales increased 2.3% in the quarter. The company also reported that U.S. distribution points expanded by mid-single-digit percentage points year-over-year in the second quarter and expects those distribution gains to continue supporting growth through the second half of fiscal 2026.
Tariff-related cash flows featured in Moody’s assessment. Newell recorded a $100 million tariff recovery in the second quarter tied to a refund of tariffs paid in 2025, and an additional $26 million recovery for tariffs paid year-to-date. Moody’s analysis presents leverage both including and excluding the $100 million refund to reflect the impact of that one-time recovery on reported metrics.
On a last-twelve-months basis ending in the second quarter, Newell’s debt-to-EBITDA ratio improved to 6.2x; excluding the $100 million tariff recovery, the ratio was 6.9x. Moody’s projects that debt-to-EBITDA will improve to about 5.3x by the end of fiscal 2026, or 5.9x when excluding the tariff refund. The ratings agency further expects that leverage will remain below 6.0x in fiscal 2027, supported by modest revenue growth, some expansion in EBITDA margins and debt reduction funded by excess free cash flow.
Newell markets a broad portfolio of consumer and commercial brands, including Rubbermaid, Graco, Oster, Coleman, Sharpie, Mr. Coffee and Yankee Candle. The company generated approximately $7.3 billion of revenue on a last-twelve-months basis ending June 30, 2026.
What this means
- Moody’s shift to a stable outlook signals a reduced near-term risk of further negative rating action, based on the company’s most recent operating and cash-flow performance.
- The assignment of a B2 rating to the proposed 2031 notes clears a path for Newell to refinance $500 million of 2027 debt on the terms Moody’s assessed.
- Credit metrics remain a focal point - improvements are expected but are sensitive to the inclusion of tariff refunds and the company’s ability to sustain distribution and mix gains.