SanfordB2B Parent Newell Brands Projects $100M Loss Due to Tariffs

By Brendan Menapace

Newell Brands Inc. shares dropped to their lowest point since January 2013 yesterday after the company released its second-quarter results, in which it pointed out that trade tensions resulting from U.S. tariffs could cost the company as much as $100 million every year and impact each one of its businesses, including Coleman, Sharpie, PaperMate, Uniball, Jostens and more. Newell is the parent company of SanfordB2B, which sells many of those writing instruments in the promotional channel.

On a conference call with analysts after the announcement of the results, Newell CEO Michael Polk said that the company could feel the impact of tariffs on Chinese goods, as well as retaliatory tariffs from the E.U. and Canada, according to MarketWatch.

"While we've announced incremental pricing [increases], we're simultaneously appealing the application, the bulk of these tariffs to the U.S. trade representative office and are considering … possible alternative sourcing options," Polk said. "Virtually every business has been impacted with the greatest exposure on baby, appliances and food."

Newell stock dropped 14 percent after the company announced that its second-quarter net income dropped to $131.7 million from $223 million during the same period last year. Net sales dropped 13 percent and total core sales dropped 8 percent.

Going forward, Polk said that there were two variables that could affect how the tariffs impact Newell's future—ability for the company to increase prices to make up for increased costs and the "recent escalation of rhetoric" regarding potentially increasing tariffs on Chinese goods to 25 percent. Polk added that the company's current pricing strategy is based on the 10 percent tariff the Trump administration initially proposed.

As we wrote before when the full list of proposed tariffs came out, there would be implications for companies selling products like writing instruments and textiles. While Newell said that the impact would be felt strongest by its food and baby businesses, the tariffs would still impact its other brands.