Newell Brands NWL Form 10-Q filing Q3 FY2025

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

See Notes to Condensed Consolidated Financial Statements (Unaudited).

See Notes to Condensed Consolidated Financial Statements (Unaudited).

See Notes to Condensed Consolidated Financial Statements (Unaudited).

See Notes to Condensed Consolidated Financial Statements (Unaudited).

NEWELL BRANDS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Footnote 1 — Basis of Presentation and Significant Accounting Policies

Description of Business

Newell Brands Inc. is a leading global consumer goods company with a strong portfolio of well-known brands, including Rubbermaid, Sharpie, Graco, Coleman, Rubbermaid Commercial Products, Yankee Candle, Paper Mate, FoodSaver, Dymo, EXPO, Elmer’s, Oster, NUK, Spontex and Campingaz. Newell Brands is focused on delighting consumers by lighting up everyday moments. The Company sells its products in over 150 countries around the world and has operations on the ground in over 40 of these countries, excluding third-party distributors. The Company has three operating segments: Home and Commercial Solutions (“H&CS”), Learning and Development (“L&D”) and Outdoor and Recreation (“O&R”).

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Newell Brands Inc. (collectively with its subsidiaries, the “Company”) have been prepared pursuant to the rules and regulations of the United States (“U.S.”) Securities and Exchange Commission (the “SEC”) and do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. In the opinion of management, the unaudited condensed consolidated financial statements include all adjustments (including normal recurring accruals) considered necessary for a fair statement of the financial position and the results of operations of the Company. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements, and the footnotes thereto, included in the Company’s most recent Annual Report on Form 10-K. The Condensed Consolidated Balance Sheet at December 31, 2024 has been derived from the audited financial statements as of that date, but it does not include all the information and footnotes required by U.S. GAAP for a complete financial statement. Certain prior year amounts have been reclassified to conform to the current year presentation.

Use of Estimates and Risks

Management’s application of U.S. GAAP in preparing the Company’s condensed consolidated financial statements requires the pervasive use of estimates and assumptions. The Company continues to be impacted by inflationary pressures, soft global demand, major retailers’ focus on tight control over their inventory levels, fluctuating interest rates and indirect macroeconomic impacts from geopolitical conflicts as well as new tariffs imposed by the current U.S. presidential administration and other countries’ retaliatory actions in response to such tariffs. The Company continues to deploy a mitigation strategy designed to offset the impact of this tariff exposure through a number of actions, including pricing, productivity and in some cases relocation of manufacturing. These collective macroeconomic trends, the duration or severity of which are highly uncertain, are still changing the retail and consumer landscape and continue to negatively impact the Company’s operating results, cash flows and financial condition and are to some degree expected to persist into the remainder of the year. As consumers continue to face widespread increases in prices and fluctuating interest rates, their discretionary spending and purchase patterns may continue to be unfavorably impacted. The high level of uncertainty of these factors has resulted in estimates and assumptions that have the potential for more variability and are more subjective. In addition, some of the other inherent estimates and assumptions used in the Company’s forecasted results of operations and cash flows that form the basis of the determination of the fair value of the reporting units for goodwill and indefinite-lived intangible asset impairment testing are outside the control of management, including interest rates, cost of capital, tax rates, tariffs, industry growth, credit ratings, foreign exchange rates and labor inflation. The next goodwill and indefinite-lived tradenames annual test and review for impairment is during the fourth quarter (on December 1). Although management has made its best estimates and assumptions based upon current information, actual results could materially differ given the uncertainty of these factors and may require future changes to such estimates and assumptions, including reserves, which may result in future expense or impairment charges. In addition, the Company has experienced a significant decline in its market capitalization as a result of a decrease in its stock price, resulting in the Company’s market capitalization being less than its consolidated stockholders’ equity. If there are further declines in the Company’s stock price, macroeconomic conditions, or industry and market conditions that may impact the current and forecasted financial performance of each reporting unit, the Company may need to record a non-cash impairment charge, which could be material, in a future period.

Seasonal Variations

Sales of the Company’s products tend to be seasonal, with sales, operating income and operating cash flow in the first quarter generally lower than any other quarter during the year, driven principally by reduced volume and the mix of products sold in the

first quarter. The seasonality of the Company’s sales volume combined with the accounting for fixed costs, such as depreciation, amortization, rent, personnel costs and interest expense, impacts the Company’s results on a quarterly basis. Also, the Company typically tends to generate the majority of its operating cash flow in the third and fourth quarters of the year due to seasonal variations in operating results, the timing of annual performance-based compensation payments, customer program payments, working capital requirements and credit terms provided to customers. In addition, uncertainty still remains over the volatility and direction of future consumer and customer demand patterns, as well as inflationary pressures inclusive of the impact of tariffs. Accordingly, the Company’s results of operations and cash flows for the three and nine months ended September 30, 2025 may not necessarily be indicative of the results that may be expected for the year ending December 31, 2025.

Recent Accounting Pronouncements

Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification (“ASC”). The Company considers the applicability and impact of recently issued and proposed ASUs.

In September 2025, the FASB issued ASU No. 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software.” This ASU establishes targeted enhancements to Subtopic 350-40 improving the operability of the recognition guidance considering different methods of software development. The update is effective for annual reporting periods beginning after December 15, 2027. Early adoption is permitted. Management is currently evaluating the effects this guidance will have on its consolidated financial statements.

In September 2025, the FASB issued ASU No. 2025-07, “Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606).” The amendments in the ASU exclude from derivative accounting non-exchange-traded contracts with underlying components that are based on operations or activities specific to one of the parties to the contract. This update is effective for annual reporting periods beginning after December 15, 2026. Early adoption is permitted. Management is currently evaluating the effects this guidance will have on its consolidated financial statements.

In November 2024, the FASB issued ASU No. 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures.” This ASU requires that each interim and annual reporting period, an entity disclose more information about the components of certain expense captions that are currently disclosed in the financial statements. This update is effective for annual reporting periods beginning after December 15, 2026. Early adoption is permitted. Management is currently evaluating the effects this guidance will have on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The standard requires all entities subject to income taxes to disclose disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The new requirement is effective for annual periods beginning after December 15, 2024. The guidance may be applied on a prospective or retrospective basis. Early adoption is permitted. The Company expects to apply the prospective method and has not elected to early adopt the standard. The Company does not expect the adoption of ASU 2023-09 to have a material impact on the consolidated financial statements.

Sales of Accounts Receivable

The Company maintains a factoring agreement with a financial institution to sell certain customer receivables (the “Customer Receivables Purchase Agreement”) up to $700 million, of eligible accounts receivable. During the nine months ended September 30, 2025 and 2024, the Company factored receivables pursuant to the Customer Receivables Purchase Agreement. The following table sets forth proceeds received and amount collected from customers and remitted to the financial institution (in millions):

Outstanding receivables sold under the Customer Receivables Purchase Agreement at September 30, 2025 and December 31, 2024 were approximately $350 million and $270 million, respectively.

In addition, the Company, through a wholly-owned special purpose entity (“SPE”), has a three-year factoring agreement with a financial institution to sell certain customer receivables up to $225 million, between February and April of each year, and up to

$275 million at all other times, of eligible accounts receivable without recourse on a revolving basis (the “Receivables Facility”). Under the Receivables Facility, certain of the Company’s subsidiaries continuously sell their accounts receivables, originated in the U.S., to the SPE, which then sells the receivables to the financial institution. The SPE is a variable interest entity for which the Company is considered to be the primary beneficiary. The SPE’s sole business consists of the purchase of receivables from certain subsidiaries of the Company and the subsequent transfer of such receivables to the financial institution. Although the SPE is included in the Company’s condensed consolidated financial statements, it is a separate legal entity with separate creditors. The assets of the SPE are not available to pay creditors of the Company or its subsidiaries. The fair value of these servicing arrangements as well as the fees earned was immaterial. During the nine months ended September 30, 2025 and 2024, the Company factored receivables pursuant to the Receivables Facility. The following table sets forth proceeds received and amount collected from customers and remitted to the financial institution (in millions):

Outstanding receivables sold under the Receivables Facility at September 30, 2025 and December 31, 2024 were approximately $135 million and $145 million, respectively.

Generally, for a receivable to be eligible under either program, the Company must have fulfilled its performance obligations and be contractually entitled to payment for such, based on a valid receivable that is not past due at the time of factoring the underlying receivable. The Company accounts for receivables sold to the financial institutions under both factoring agreements as a sale of financial assets and derecognizes the trade receivables from the Company’s Condensed Consolidated Balance Sheets. The Company classifies the proceeds received from the sales of accounts receivable to the financial institutions as an operating cash flow and collections of accounts receivables not yet remitted to the financial institutions as financing cash flow in the Condensed Consolidated Statements of Cash Flows, and such collections are classified as restricted cash (included in prepaid expenses and other current assets) on the Company’s Condensed Consolidated Balance Sheets. Restricted cash related to both programs was $40 million and $21 million at September 30, 2025 and December 31, 2024, respectively. The Company records the discounts as other (income) expense, net in the Condensed Consolidated Statements of Operations.

Supplier Finance Program Obligations

The Company has an arrangement with a third-party vendor which provides a service for the Company’s suppliers, at their sole discretion, to sell their receivables due from the Company to various financial institutions, who at their sole discretion, contract with the third-party vendor to participate in the supplier finance program (the “SFP”).

The Company and its suppliers agree on contractual terms for the goods and services procured, including prices, quantities and payment terms, regardless of whether the supplier elects to participate in the SFP. The suppliers sell goods or services, as applicable, to the Company and issue the associated invoices to the Company based on the agreed-upon contractual terms. Suppliers that participate in the SFP, at their sole discretion, determine which invoices, if any, they want to sell to the third-party vendor. The suppliers’ voluntary inclusion of invoices in the SFP does not change the Company’s existing contractual terms with its suppliers. The Company does not provide any guarantees or collateral under the SFP, nor does it have any economic interest in a supplier’s decision to participate in the SFP. Amounts due to suppliers participating in the SFP are included in accounts payable in the Condensed Consolidated Balance Sheets and amounts paid to suppliers participating in the SFP are classified as operating cash flows in the Condensed Consolidated Statement of Cash Flows. Supplier payment terms for those participating in the SFP averaged approximately 122 days.

The following table sets forth the outstanding payment obligations due to the third-party vendor and activities related to the suppliers who participated in the SFP (in millions):

Sale of Equity Interest in a Joint Venture

In August 2025, the Company sold its equity interest in a joint venture for approximately $22 million, subject to customary working capital and other post-closing adjustments, and recorded a pretax gain of approximately $12 million, which was included in other (income) expense, net in the Condensed Consolidated Statements of Operations.

Fair Value Measurements

The Company’s financial instruments include cash and cash equivalents, accounts receivable, investment securities, accounts payable, derivative instruments and short and long-term debt. The carrying values for current financial assets and liabilities, including cash and cash equivalents, accounts receivable, accounts payable and short-term debt approximate fair value due to the short maturity of such instruments. For publicly traded investment securities, including mutual funds, fair value is determined on the basis of quoted market prices and, accordingly, such investments are classified as Level 1 of the fair value hierarchy. The fair value of such investments was not material at September 30, 2025 and December 31, 2024. The fair values of the Company’s long-term debt and derivative instruments are disclosed in Footnote 8 and Footnote 9, respectively. The Company’s nonfinancial assets, which are measured at fair value on a nonrecurring basis, include property, plant and equipment, goodwill, intangible assets and certain other assets. In addition, the Company adjusts its pension asset values to fair value on an annual basis.

Footnote 2 — Accumulated Other Comprehensive Income (Loss)

The following table displays the changes in Accumulated Other Comprehensive Income (Loss) (“AOCL”) by component, net of tax, for the nine months ended September 30, 2025 (in millions):

(1) Includes income tax provision (benefit) allocated to AOCL as follows $(68) million, $(3) million, $(4) million and $(75) million, respectively.

(2) Income tax provision (benefit) for both the three and nine months ended September 30, 2025 and 2024 were not material. Pension and postretirement costs presented are primarily classified in other (income) expense, net within the Condensed Consolidated Statements of Operations. Refer to Footnote 9 for the statements of operations classifications of the Company’s various types of derivative financial instruments.

Reclassifications from AOCL to the results of operations on a before and after-tax basis for the for the three and nine months ended September 30, 2025 and 2024 were not material for any of the periods presented.

Footnote 3 — Restructuring

To better align its resources with its strategy and operating model and to reduce the cost structure of its global operations, the Company commits to restructuring plans as necessary and as follows:

Organizational Realignment Plan

In January 2024, the Company announced a plan to strengthen its front-end commercial capabilities, such as consumer understanding and brand communication, in support of the “where to play” and “how to win” strategy choices the Company unveiled in June of 2023 (the “Realignment Plan”). In addition to improving accountability, the Realignment Plan was designed to unlock operational efficiencies and cost savings, reduce complexity and free up funds for reinvestment. As part of the Realignment Plan, the Company has made several operating model changes, which entailed: standing up a cross-functional brand management organization, realigning business unit finance to fully support the new global brand management model, further simplifying and standardizing regional go-to-market organizations, and centralizing domestic retail sales teams, the digital technology team, business-aligned accounting personnel, the Manufacturing Quality team, and the Human Resources functions into the appropriate center-led teams to drive standardization, efficiency and scale with a One Newell approach. The Company has also further optimized the Company’s real estate footprint and pursued other cost reduction initiatives. These actions were primarily implemented by the end of 2024. The remaining actions, subject to applicable local law and consultation requirements, are expected to be implemented by the end of fiscal year 2025. Restructuring and restructuring-related charges associated with

these actions are estimated to be in the range of $75 million to $90 million, mainly for severance payments and other termination benefits, office space reduction and consolidation and other expenses.

In connection with the Realignment Plan, the Company recorded restructuring and restructuring-related costs for the periods indicated as follows (in millions):

Other Restructuring and Restructuring-Related Costs

The Company also incurs other restructuring and restructuring-related costs in connection with various discrete initiatives as well as previously announced but substantially completed restructuring activities. Restructuring-related costs are recorded in cost of products sold, selling, general and administrative expenses (“SG&A”) and impairment of other assets in the Condensed Consolidated Statements of Operations based on the nature of the underlying charges incurred.

The Company recorded restructuring costs, net and restructuring-related costs in connection with various discrete initiatives as well as previously announced but substantially completed restructuring activities for the periods indicated as follows (in millions):

Restructuring costs, net incurred by reportable business segments for all restructuring activities for the periods indicated are as follows (in millions):

Accrued restructuring costs related to all restructuring activities for the nine months ended September 30, 2025 were as follows (in millions):

Footnote 4 — Inventories

Inventories are comprised of the following (in millions):

Footnote 5 — Property, Plant and Equipment, Net

Property, plant and equipment, net, is comprised of the following (in millions):

Depreciation expense was $47 million in both the three months ended September 30, 2025 and 2024 and $137 million and $142 million for the nine months ended September 30, 2025 and 2024, respectively.

Footnote 6 — Goodwill and Other Intangible Assets, Net

Goodwill activity for the nine months ended September 30, 2025 is as follows (in millions):

Other intangible assets, net, are comprised of the following (in millions):

Amortization expense for intangible assets was $30 million and $34 million for the three months ended September 30, 2025 and 2024, respectively and $94 million and $103 million for the nine months ended September 30, 2025 and 2024, respectively.

During the third quarter of 2024, the Company concluded that triggering events had occurred for indefinite-lived tradenames in the H&CS and L&D segments, as a result of downward revisions of forecasted cash flows primarily due to lower volume and profitability expectations. The Company performed quantitative impairment tests and determined that certain indefinite-lived tradenames in the H&CS and L&D segments were impaired. During the third quarter of 2024, the Company recorded non-cash impairment charges of $190 million and $70 million for certain indefinite-lived tradenames in the H&CS and L&D segments, respectively, as the carrying values exceeded their fair values.

Footnote 7 — Other Accrued Liabilities

Other accrued liabilities are comprised of the following (in millions):

Footnote 8 — Debt

Debt is comprised of the following at the dates indicated (in millions):

(1) Included in short-term debt and current portion of long-term debt at September 30, 2025 and December 31, 2024.

Senior Notes

In May 2025, in an offering exempt from the registration requirements of the Securities Act of 1933 and all state securities laws, the Company completed the offering and sale of $1.25 billion of 8.500% senior notes due 2028 (the “2028 Notes”) and received proceeds of approximately $1.23 billion, net of fees and expenses paid. The 2028 Notes were issued pursuant to an indenture, dated as of May 22, 2025, between the Company and U.S. Bank Trust Company, National Association (the “Indenture”). The Indenture provides, among other things that the 2028 Notes are the senior unsecured obligations of the Company and includes covenants that limit the ability of the Company and its subsidiaries to incur or guarantee additional debt, create or permit certain liens, redeem or repurchase certain debt, consummate certain assets sales, make certain loans and investments, consolidate, merge or sell all or substantially all of the Company and its subsidiaries assets, enter into certain transactions with affiliates and pay distributions on, or redeem or repurchase the Company’s capital stock, subject in each case to certain qualifications and

exceptions, including the termination of certain of these covenants upon the 2028 Notes receiving investment grade credit ratings. The Company used the proceeds of the offering to fully redeem its outstanding 4.200% senior notes due 2026 (the “2026 Notes”).

In June 2025, the Company fully redeemed its 2026 Notes at a redemption price equal to 100.757% of the outstanding aggregate principal amount of the notes, plus accrued unpaid interest to the redemption date. The total consideration was approximately $1.25 billion. As a result of the redemption, the Company recorded a loss on debt extinguishment of $13 million.

Revolving Credit Facility

The Company maintains a $1.00 billion senior secured revolving credit facility (the “Credit Revolver”) maturing in August 2027. Under the Credit Revolver, the Company may borrow funds on a variety of interest terms. The Credit Revolver agreement (i) requires the Company to satisfy financial covenants testing the Company’s Collateral Coverage Ratio and Total Net Leverage Ratio (each further defined in the Credit Revolver, as amended), (ii) requires the Company and certain of its domestic and foreign subsidiaries (the “Guarantors”) to guaranty Company obligations under the Credit Revolver and (iii) requires the Company and other Guarantors to grant a lien and security interest in certain assets consisting of eligible accounts receivables, eligible inventory, eligible equipment and eligible intellectual property, and all products and proceeds of the foregoing, subject to certain limitations. Other than outstanding borrowings under the Credit Revolver, availability under the Credit Revolver is subject to change in accordance with the terms of the agreement, including in response to changes in the Company’s pledged collateral value or outstanding letters of credit under the Credit Revolver. At September 30, 2025, there was $932 million of availability under the Credit Revolver, based on the value of the pledged collateral and prior to giving effect to outstanding borrowings and letters of credit.

The Credit Revolver provides for the issuance of up to $150 million of letters of credit, so long as there is sufficient availability for borrowing under the Credit Revolver. At September 30, 2025, the Company had approximately $35 million of outstanding standby letters of credit issued against the Credit Revolver and $190 million of outstanding borrowings under the Credit Revolver resulting in a net availability of approximately $707 million.

Other

During the second quarter of 2025, Moody’s Corporation (“Moody’s”) and S&P Global Inc. (“S&P”) downgraded the Company’s senior unsecured debt rating to “B1” and “B+”, respectively. As a result, certain of the Company’s outstanding senior notes aggregating to approximately $2.31 billion at that time (the “Coupon-Step Notes”) were subject to an interest rate adjustment of 25 basis points for each downgrade, or 50 basis points in the aggregate, with such adjustments to take effect in the fourth quarter of this year. The redemption of the 2026 Notes in June 2025 decreased the aggregate amount of the Coupon-Step Notes to $1.08 billion. The change to the interest rate due to the downgrades will increase the Company’s interest expense by approximately $5 million on an annualized basis (approximately $1 million in 2025).

The indentures governing the Company’s senior notes contain usual and customary nonfinancial covenants, with the 2028 Notes containing additional covenants, such as described above, and the 6.375% notes due 2027 and the 6.625% notes due 2032 likewise containing additional covenants consistent with the 2028 Notes, such as described in the Company’s most recent Annual Report on Form 10-K, filed on February 14, 2025. The Company’s borrowing arrangements other than the senior notes contain usual and customary nonfinancial covenants and certain financial covenants, including minimum collateral coverage and net leverage ratios.

Weighted average interest rates are as follows:

The fair value of the Company’s senior notes are based upon prices of similar instruments in the marketplace and are as follows (in millions):

The carrying amounts of all other debt approximates fair value.

Footnote 9 —Derivatives

From time to time, the Company enters into derivative transactions to hedge its exposures to interest rate, foreign currency rate and commodity price fluctuations. The Company does not enter into derivative transactions for trading purposes. The Company is not a party to any derivative agreements that require collateral to be posted prior to settlement.

Interest Rate Contracts

The Company manages its fixed and floating rate debt mix using interest rate swaps. The Company may use fixed and floating rate swaps to alter its exposure to the impact of changing interest rates on its consolidated results of operations and future cash outflows for interest. Floating rate swaps would be used, depending on market conditions, to convert the fixed rates of long-term debt into short-term variable rates. Fixed rate swaps would be used to reduce the Company’s risk of the possibility of increased interest costs. The settlement of interest rate swaps is included in interest expense, net in the Condensed Consolidated Statements of Operations.

At September 30, 2025, the Company had approximately $1.00 billion notional amount of interest rate swaps due September 2027 and September 2029 that exchange a fixed rate of interest for a variable rate of interest plus a weighted average spread. These floating rate swaps are designated as fair value hedges against the principal of the 6.375% senior notes due 2027 and the 6.625% senior notes due 2029 for the remaining life of the notes. The effective portion of the fair value gains or losses on these swaps is offset by fair value adjustments in the underlying debt.

Cross-Currency Contracts

The Company uses cross-currency swaps to hedge foreign currency risk on certain financing arrangements. These swaps mature on dates ranging from November 2026 to September 2029, with an aggregate notional amount of $2.13 billion. These cross-currency swaps were designated as net investment hedges of the Company’s foreign currency exposure of its net investment in certain Euro-functional currency subsidiaries with Euro-denominated net assets, and the Company pays a fixed or floating rate of Euro-based interest and receives a fixed or floating rate of U.S. dollar interest. The Company has elected the spot method for assessing the effectiveness of these contracts. During the three months ended September 30, 2025 and 2024, the Company recognized income of $9 million each period, and the Company recognized income of $26 million in each of the nine months ended September 30, 2025 and 2024, in interest expense, net, related to the portion of cross-currency swaps excluded from hedge effectiveness testing.

Foreign Currency Contracts

The Company uses forward foreign currency contracts to mitigate the foreign currency exchange rate exposure on the cash flows related to forecasted inventory purchases and sales with maturity dates through September 2026. The derivatives used to hedge these forecasted transactions that meet the criteria for hedge accounting are accounted for as cash flow hedges. The effective portion of the gains or losses on these derivatives is deferred as a component of AOCL until it is recognized in earnings at the same time that the hedged item affects earnings and is included in the same caption (net sales and cost of products sold) in the Company’s Condensed Consolidated Statement of Operations as the underlying hedged item. At September 30, 2025, the Company had approximately $228 million notional amount outstanding of forward foreign currency contracts that are designated as cash flow hedges of forecasted inventory purchases and sales.

The Company also uses foreign currency contracts, primarily forward foreign currency contracts, to mitigate the foreign currency exposure of certain other foreign currency transactions. At September 30, 2025, the Company had approximately $1.03 billion notional amount outstanding of these foreign currency contracts that are not designated as effective hedges for accounting purposes and have maturity dates through September 2026. Fair market value gains or losses are included in the results of operations and are classified in other (income) expense, net in the Company’s Condensed Consolidated Statement of Operations.

Fair Value Measurements of Derivative Instruments

The Company determines the fair value of its derivative instruments using standard pricing models and market-based assumptions for all significant inputs, such as yield curves and quoted spot and forward exchange rates. Accordingly, the Company’s derivative instruments are classified as Level 2 of the fair value hierarchy. At September 30, 2025 and December 31, 2024, the fair value of the Company’s derivative financial instruments designated as effective hedges were not material by type of instrument, with the exception of cross-currency swaps included in other noncurrent liabilities. At September 30, 2025, the fair

value of the derivatives, designated as effective hedges, were recorded in prepaid expenses and other current assets, other accrued liabilities, and other noncurrent liabilities of $21 million, $9 million and $271 million (including cross-currency swaps of $269 million), respectively. At December 31, 2024, the fair value of the derivatives, designated as effective hedges, were recorded in prepaid expenses and other current assets, other assets, other accrued liabilities, and other noncurrent liabilities of $39 million, $38 million, $8 million, and $64 million (including cross-currency swaps of $41 million), respectively. The fair value of the Company’s derivative financial instruments not designated as effective hedges were not material at September 30, 2025 and December 31, 2024.

The gain or loss activity related to the Company’s interest rate swaps and foreign currency contract derivative financial instruments, designated or previously designated as effective hedges, recognized in other comprehensive income (effective portion) were not material to any of the periods presented, except for its cross-currency swaps. The Company recognized gain of $14 million and loss of $88 million related to the Company’s cross-currency swaps, designated or previously designated as effective hedges, for the three months ended September 30, 2025 and 2024, respectively and loss of $275 million and $22 million for the nine months ended September 30, 2025 and 2024, respectively.

The amount reclassified from AOCL to income has been presented in Footnote 2. The gain or loss activity recognized related to derivatives that are not designated as hedging instruments were not material for the periods presented. Gains and losses on these derivatives are mostly offset by foreign currency movement in the underlying exposure.

At September 30, 2025, net deferred losses to be reclassified to earnings over the next twelve months are not expected to be material.

Footnote 10 — Income Taxes

The Company’s effective income tax rates for the three months ended September 30, 2025 and 2024 were provision of 50.0% and benefit of 3.4%, respectively, and a provision of 48.3% and benefit of 10.5% for the nine months ended September 30, 2025 and 2024, respectively, due primarily to a decrease in discrete tax benefits year over year for both three- and nine-month periods.

The differences between the U.S. federal statutory income tax rate of 21.0% and the Company’s effective income tax rate for the three and nine months ended September 30, 2025 and 2024 were impacted by a variety of factors, primarily resulting from the geographic mix of where the income was earned, as well as certain taxable income inclusion items in the U.S. based on foreign earnings. For the period ended September 30, 2025, these items increased the tax rates more than the prior period due to the lower forecasted pretax book income for 2025. In periods where forecasted pretax income is relatively low, the proportional impact of these items on the effective rate may be significant.

The three and nine months ended September 30, 2025 were impacted by certain discrete items. Income tax expense for the three months ended September 30, 2025 included discrete benefits of $16 million due to the finalization of tax returns in various jurisdictions, primarily the U.S. and Switzerland, offset by discrete expense of $5 million due to the revaluation of deferred tax assets for a statutory rate change in Germany and $5 million of tax expense related to the disposition of the Company’s equity interest in a joint venture. The nine months ended September 30, 2025 also included certain discrete items totaling $2 million of additional income tax benefit.

The three and nine months ended September 30, 2024 were impacted by certain discrete items. Income tax benefit for the three months ended September 30, 2024 included discrete benefits of $44 million associated with non-cash impairment charges offset by $3 million of additional income tax expense. The nine months ended September 30, 2024 also included certain discrete items including a benefit of $64 million associated with a reduction in liabilities for unrecognized tax benefits, as a result of the tax authorities’ examination of its U.S. tax returns for the years 2011 to 2015 and its Brazil tax returns for the years 2015 to 2017, offset by $8 million of interest expense associated with uncertain tax liabilities, $7 million of additional tax related to withholding taxes associated with certain previously taxed earnings that are no longer indefinitely reinvested and $3 million of additional income tax expense.

In June 2025, the Company filed its amended 2019 U.S. federal income tax return to carry back capital losses generated in 2020. This resulted in an increase in income tax expense of $3 million and an aggregate increase in noncurrent income taxes receivable of $10 million, and an increase in deferred tax liabilities of approximately $13 million.

In April 2025, the Company paid $31 million of tax for the one-time toll charge incurred in 2017 related to the Tax Credits and Jobs Act, due to the Internal Revenue Service (“IRS”) having not yet processed the amended 2017 return, which the Company filed during the year ended December 31, 2022. This resulted in an increase to the Company’s noncurrent income tax receivable.

In March 2025, the Company finalized its amended 2023 U.S. federal income tax return and updated its estimate of the 2024 U.S. federal income tax return. This resulted in an aggregate reduction in current income taxes payable and an increase in deferred tax liabilities of approximately $31 million.

The Company files numerous consolidated and separate income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The statute of limitations for the Company’s U.S. federal income tax returns has expired for years prior to 2011 and for 2016. With few exceptions, the Company is no longer subject to other income tax examinations for years before 2016.

Other Matters

On July 4, 2025, the U.S. enacted the One Big Beautiful Bill Act (the “OBBBA”). The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including modifications to the international tax framework, and allows immediate expensing of domestic research and development costs and changes limitations related to the expensing of business interest expense. Based on the Company’s current analysis of the OBBBA, management does not expect these tax law changes to have a material impact on the Company’s consolidated financial statements. However, management will continue to evaluate the effects the OBBBA will have on its consolidated financial statements.

On July 19, 2024, the Company filed a petition in the U.S. Tax Court disputing a proposed assessment by the IRS of $80 million in additional taxes and $34 million in penalties plus the additional interest calculated upon final settlement related to the transfer pricing of services performed by certain of the Company’s foreign affiliates for the tax years 2011 to 2015. The Company believes that adequate amounts have been reserved for any adjustments that may ultimately result. If the IRS prevails in the assessment of additional tax, interest and penalties in excess of the Company’s current reserves, such outcome could have a material adverse effect on the Company’s financial position and results.

Footnote 11 — Weighted Average Shares Outstanding

(1) The three and nine months ended September 30, 2024 excludes 2.5 million and 2.8 million, respectively, of potentially dilutive share-based awards as their effect would be anti-dilutive.

At September 30, 2025, there were no potentially dilutive share awards with performance-based targets that were not met. At September 30, 2024, there were 0.7 million potentially dilutive share awards with performance-based targets that were not met and as such, were excluded from the computation of diluted earnings per share.

Footnote 12 — Share-Based Compensation

During the nine months ended September 30, 2025, primarily in connection with its annual grant, the Company granted 2.0 million performance-based restricted stock units (“RSUs”), with an aggregate grant date fair value of $14 million. These performance-based RSUs entitle the recipients to shares of the Company’s common stock and vest primarily at the end of a three-year period, subject to continued employment. The actual number of shares that will ultimately be paid upon vesting is dependent on the level of achievement of the specified performance conditions.

During the nine months ended September 30, 2025, primarily in connection with its annual grant, the Company also granted 6.4 million time-based RSUs with an aggregate grant date fair value of $45 million. These time-based RSUs entitle recipients to shares of the Company’s common stock and primarily vest in annual installments over a three-year period, subject to continued employment.

Footnote 13 — Segment Information

The Company’s three reportable segments are:

Segment Key Brands Description of Primary Products

Home and Commercial Solutions Ball(1), Calphalon, Crockpot, FoodSaver, Mapa, Mr. Coffee, Oster, Rubbermaid, Rubbermaid Commercial Products, Sistema, Spontex, Sunbeam, WoodWick and Yankee Candle Commercial cleaning and maintenance solutions; closet and garage organization; hygiene systems and material handling solutions; household products, including kitchen appliances; food and home storage products; fresh preserving products; vacuum sealing products; gourmet cookware, bakeware and cutlery and home fragrance products

Learning and Development Dymo, Elmer’s, EXPO, Graco, NUK, Paper Mate, Parker and Sharpie Baby gear and infant care products; writing instruments, including markers and highlighters, pens and pencils; art products; activity-based products and labeling solutions

Outdoor and Recreation Campingaz, Coleman, Contigo and Marmot Active lifestyle products for outdoor and outdoor-related activities; technical apparel and on-the-go beverageware

(1) and Ball®, TMs of Ball Corporation, used under license.

The President and Chief Executive Officer of the Company, who is the Chief Operating Decision Maker (the “CODM”) reviews the businesses as three operating segments: Home and Commercial Solutions, Learning and Development and Outdoor and Recreation. This structure reflects the manner in which the CODM regularly assesses information for decision-making purposes, including the allocation of resources. The Company also provides general corporate services to its segments which is reported as a non-operating segment, Corporate.

The CODM evaluates the segments’ operating performance based on segment operating income, defined as net sales minus cost of products sold, segment SG&A (including share-based compensation at target for operating segment employees) and other segment costs. Segment SG&A includes an allocation of center-led corporate functions including the bonus for such corporate functions based on achieving 100% of the respective target. However, any variability in expense from such targets, favorable or unfavorable, is retained at corporate, and would be reflected as a corporate expense. Segment SG&A also does not include any allocation of share-based compensation related to such center-led corporate functions or any adjustments, favorable or unfavorable, between the actual share-based compensation achieved versus the share-based compensation at target for operating segment employees, which items are also reflected in corporate expense. The CODM considers budget-to-current forecast and prior actuals-to-current forecast variances for segment operating income on a periodic basis for evaluating performance of each segment and making decisions about allocating capital and other resources to each segment.

The Company’s results by segment are as follows (in millions):

(1) All intercompany transactions have been eliminated.

(2) Other segment costs primarily include segment restructuring costs, net and impairment of acquired intangible assets (see Footnotes 3 and 6, respectively, for further information).

(3) Corporate expenses primarily include costs of operating as a public company, including retained costs of center-led corporate functions, corporate restructuring and restructuring-related costs (see Footnote 3 for further information) and impairment of other assets. In addition, corporate expense includes all share-based compensation and all adjustments, favorable or unfavorable, between the actual bonus achieved versus the bonus at target for center-led corporate functions, as well as all adjustments, favorable or unfavorable, between the actual share-based compensation achieved versus the share-based compensation at target for operating segment employees.

Depreciation and amortization by segment are as follows (in millions):

Capital expenditures by segment are as follows (in millions):

Assets by segment are as follows at (in millions):

The following table disaggregates net sales(1) by major product grouping for the periods indicated (in millions):

(1) All intercompany transactions have been eliminated.

The following table disaggregates net sales(1) by geography(2) for the periods indicated (in millions):

(1) All intercompany transactions have been eliminated.

(2) Geographic sales information is based on the region from which the products are shipped and invoiced.

Footnote 14 — Litigation and Contingencies

The Company is subject to various claims and lawsuits in the ordinary course of business, including from time to time, contractual disputes, employment and environmental matters, product and general liability claims, claims that the Company has infringed on the intellectual property rights of others, and consumer and employment class actions. Some of the legal proceedings include claims for punitive as well as compensatory damages. In the ordinary course of business, the Company is also subject to

legislative requests, regulatory and governmental examinations, information requests and subpoenas, inquiries, investigations, and threatened legal actions and proceedings. In connection with such formal and informal inquiries, the Company receives numerous requests, subpoenas, and orders for documents, testimony and information in connection with various aspects of its activities.

Environmental Matters

The Company is involved in various matters concerning federal and state environmental laws and regulations, including matters in which the Company has been identified by the U.S. Environmental Protection Agency (“U.S. EPA”) and certain state environmental agencies as a potentially responsible party (“PRP”) at contaminated sites under the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”) and equivalent state laws. In assessing its environmental response costs, the Company has considered several factors, including the extent of the Company’s volumetric contribution at each site relative to that of other PRPs; the kind of waste; the terms of existing cost sharing and other applicable agreements; the financial ability of other PRPs to share in the payment of requisite costs; the Company’s prior experience with similar sites; environmental studies and cost estimates available to the Company; the effects of inflation on cost estimates; and the extent to which the Company’s and other parties’ status as PRPs is disputed.

The Company’s estimate of environmental remediation costs associated with these matters at September 30, 2025 was $33 million which is included in other accrued liabilities and other noncurrent liabilities in the Condensed Consolidated Balance Sheets. No insurance recovery was taken into account in determining the Company’s cost estimates or reserves, nor do the Company’s cost estimates or reserves reflect any discounting for present value purposes, except with respect to certain long-term operations and maintenance CERCLA matters. Because of the uncertainties associated with environmental investigations and response activities, the possibility that the Company could be identified as a PRP at sites identified in the future that require the incurrence of environmental response costs and the possibility that sites acquired in business combinations may require environmental response costs, actual costs to be incurred by the Company may vary from the Company’s estimates.

Lower Passaic River Matter

Over 100 entities, including the Company and its subsidiary, Berol Corporation (together, the “Company Parties”), have been identified as PRPs at the Diamond Alkali Superfund Site (the “Site”) pursuant to CERCLA. The Site is divided into four “operable units,” and the Company Parties have received notice letters in connection with operable Unit 4 and operable Unit 2 (which is geographically subsumed within Unit 4). The U.S. EPA has issued records of decision for Units 2 and 4 with selected remedies that are estimated to cost approximately $1.8 billion in the aggregate. In September 2017, the U.S. EPA announced an allocation process involving roughly 80 PRPs, with the intent of offering cash-out settlements to a number of parties. The allocation process has concluded, and the Company Parties were placed in the lowest tier of relative responsibility among allocation parties. On January 31, 2024, U.S. EPA filed a motion to enter a modified consent decree to resolve the liability of the Company Parties and other settlement parties for past and future CERCLA response costs at Unit 2 and Unit 4 (“Consent Decree”), which the court granted on December 18, 2024. The Court’s order entering the Consent Decree has been appealed. As of the date of this filing, the Company does not expect that its share of payments toward the Consent Decree, if the Consent Decree is upheld following any appellate review, will be material to the Company.

In June 2018, Occidental Chemical Corporation (“OCC”) sued over 100 parties, including the Company Parties, in the U.S. District Court in New Jersey pursuant to CERCLA, requesting cost recovery, including past and future costs for investigation, design and remediation of Units 2 and 4, as well as contribution and a declaratory judgement (the “OCC Litigation”). The defendants, in turn, filed claims against 42 third-party defendants and counterclaims against OCC. OCC has also stated that it anticipates asserting claims against defendants regarding Newark Bay, which is also part of the Site, after the U.S. EPA has selected the Newark Bay remedy. The OCC Litigation is stayed pending the Court’s adjudication of the entry of the Consent Decree. At this time, the Company cannot predict the eventual outcome of the OCC Litigation.

In addition, federal trustees, including the U.S. Department of Commerce and Department of the Interior, continue to undertake a Natural Resource Damage Assessment with respect to the Site, having previously identified the Company Parties, along with numerous other entities, as PRPs.

Based on currently known facts and circumstances, the Company does not believe that the Lower Passaic River matter is reasonably likely to have a material impact on the Company’s results of operations. However, in the event of one or more adverse determinations related to this matter, including the OCC Litigation and Natural Resource Damage Assessment noted above (for which the Company cannot currently estimate the range of possible losses), it is possible that the ultimate liability resulting from this matter and the impact on the Company’s results of operations could be material.

Because of the uncertainties associated with environmental investigations and response activities, the possibility that the Company could be identified as a PRP at sites identified in the future that require the incurrence of environmental response costs and the possibility that sites acquired in business combinations may require environmental response costs, actual costs to be incurred by the Company may vary from the Company’s estimates.

French Door Countertop Ovens Recall

On September 25, 2025, the Company announced a recall in the U.S. and Canada of certain of its Oster French Door Countertop Ovens in the H&CS segment. The Company determined that the recalled product may present users with a potential safety concern, as the doors could unexpectedly close and pose a burn hazard to users, and the recall offers a repair kit to address the hazard. During the quarter ended September 30, 2025, the Company recorded a reserve of $6 million relating to this recall representing its best estimate of risk of loss.

Other Matters

In the normal course of business and as part of its acquisition and divestiture strategy, the Company may provide certain representations and indemnifications related to legal, environmental, product liability, tax or other types of issues. Based on the nature of these representations and indemnifications, it is not possible to predict the maximum potential payments under all of these agreements due to the conditional nature of the Company’s obligations and the unique facts and circumstances involved in each particular agreement. Historically, payments made by the Company under these agreements did not have a material effect on the Company’s business, financial condition or results of operations. In connection with the Company’s sale of The United States Playing Card Company (“USPC”), Cartamundi, Inc. and Cartamundi España, S.L., (the “Buyers”) have notified the Company of their contention that certain representations and warranties in the Stock Purchase Agreement, dated June 4, 2019, were inaccurate and/or breached, and have sought indemnification to the extent that the Buyers are required to pay related damages arising out of a third party lawsuit that was filed against USPC in 2021.

Although the Company cannot predict the ultimate outcome of other proceedings with certainty, it believes that the ultimate resolution of the Company’s proceedings, including any amounts it may be required to pay in excess of amounts reserved, will not have a material effect on the Company’s Condensed Consolidated Financial Statements, except as otherwise described in this Footnote 14.

At September 30, 2025, the Company had approximately $49 million in standby letters of credit primarily related to the Company’s self-insurance programs, including workers’ compensation, product liability and medical expenses.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of Newell Brands Inc.’s (“Newell Brands,” the “Company,” “we,” “us” or “our”) consolidated financial condition and results of operations. The discussion should be read in conjunction with the accompanying condensed consolidated financial statements and notes thereto.

In August 2025, the Company sold its equity interest in a joint venture for approximately $22 million, subject to customary working capital and other post-closing adjustments, and recorded a pretax gain of approximately $12 million, which was included in other (income) expense, net in the Condensed Consolidated Statements of Operations.

Results of Operations

Three Months Ended September 30, 2025 vs. Three Months Ended September 30, 2024

Consolidated Operating Results

NM - NOT MEANINGFUL

Net sales for the three months ended September 30, 2025 decreased 7%. Net sales were unfavorably impacted primarily by continued softness in global demand in the H&CS segment. In addition, net sales were unfavorably impacted by reduced retailer inventory levels primarily in the L&D segment and to a lesser extent in the H&CS segment. These unfavorable factors were partially mitigated by launches of product innovations in the H&CS and L&D segments. Changes in foreign currency favorably impacted net sales by $11 million, or less than 1%.

Gross profit decreased 9% compared to the prior year. Gross margin declined to 34.1% as compared with 34.9% in the prior year. The impact of lower sales volume, additional tariffs of approximately $55 million, inflation and approximately $6 million of costs associated with a product recall in the H&CS segment, were partially offset by gross productivity, pricing actions and lower restructuring-related charges of approximately $13 million. Changes in foreign currency exchange rates favorably impacted gross profit by $2 million, or less than 1%.

Notable items, other than those noted above, impacting operating income (loss) for the three months ended September 30, 2025 and 2024 were as follows (in millions):

(1) The three months ended September 30, 2024 includes non-cash impairment charges of $190 million and $70 million for certain indefinite-lived tradenames in the H&CS and L&D segments, respectively. See Footnote 6 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

(2) For the three months ended September 30, 2025, restructuring-related costs reported in selling, general and administrative expenses (“SG&A”) were $3 million and primarily relate to facility closures associated with various discrete initiatives as well as previously disclosed but substantially completed restructuring activities. For the three months ended September 30, 2024, restructuring-related costs reported in cost of products sold and SG&A were $13 million and $5 million, respectively, primarily related to facility closures associated with previously disclosed Network Optimization Project and Project Phoenix, as well as the Realignment Plan and other discrete initiatives. Restructuring costs were $5 million and $4 million for the three months ended September 30, 2025 and 2024, respectively, primarily related to the Realignment Plan. See Footnote 3 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

(3) Transaction costs and other for the three months ended September 30, 2025 includes expenses for certain legal proceedings and completed divestitures, costs of a product recall (see Footnote 14 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information), fire-related losses and hyperinflationary currency movements. For the three months ended September 30, 2024 transaction and other costs related to hyperinflationary currency movements and to accelerated amortization and write-off of other assets associated with integration projects.

Operating income was $119 million as compared to operating loss of $121 million in the prior year period. The operating results in the prior year period included non-cash impairment charges of $260 million for certain indefinite-lived tradenames in the H&CS and L&D segments. The improvement in the current period also reflects the impact of savings from restructuring actions primarily related to the Realignment Plan and lower incentive compensation expense of approximately $36 million, partially offset by lower gross profit of $63 million and higher advertising and promotion costs of $6 million.

Interest expense, net increased by $8 million due to higher interest rates and lower interest income. The weighted average interest rates for the three months ended September 30, 2025 and 2024 were approximately 6.6% and 5.8%, respectively. See Footnote 8 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

Other (income) expense, net for the three months ended September 30, 2025 and 2024 includes the following items (in millions):

During the three months ended September 30, 2025, the Company sold its equity interest in a joint venture and realized a pretax gain of $12 million.

The income tax provision for the three months ended September 30, 2025 was $21 million as compared to benefit of $7 million for the three months ended September 30, 2024. The Company’s effective income tax rates for the three months ended September 30, 2025 and 2024 were provision of 50.0% and benefit of 3.4% respectively. The increase in the tax rate is primarily due to a decrease in discrete benefits in the current period and lower forecasted pretax book income for 2025. In periods where forecasted pretax income is relatively low, the proportional impact of these items on the effective rate may be significant. See Footnote 10 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

Business Segment Operating Results

Home and Commercial Solutions

NM - NOT MEANINGFUL

H&CS net sales for the three months ended September 30, 2025 decreased 10%. The net sales decrease in H&CS was driven by soft global demand in the Kitchen business and distribution losses in the Commercial business, as well as the timing of retailer orders for relaunched Home Fragrance products and a decrease in the Company’s retail store sales. In addition, business exits primarily in the Kitchen business unfavorably impacted net sales by approximately 1%. These unfavorable factors were partially mitigated by launches of product innovations. Changes in foreign currency favorably impacted net sales by approximately $5

million, or less than 1%.

Operating income for the three months ended September 30, 2025 was $40 million as compared to operating loss of $94 million in the prior year. The improvement in operating results is primarily due to the absence of $190 million of non-cash impairment charge for an indefinite-lived tradename in the prior year and savings from restructuring actions mostly related to the Realignment Plan, partially offset by lower gross profit of $53 million, primarily due to the impact of lower sales volume, additional tariffs and inflation.

Learning and Development

L&D net sales for the three months ended September 30, 2025 decreased 5%. Net sales in the Writing business decreased primarily due to softer international demand and to a lesser extent, a shift of certain order activity to the second quarter, partially offset by contributions from launches of product innovations. Net sales in the Baby business declined primarily due to retailer inventory actions, including delivery preferences shifting away from direct import, partially offset by contributions from launches of product innovations. Changes in foreign currency favorably impacted net sales by approximately $4 million, or 1%.

Operating income for the three months ended September 30, 2025 increased to $124 million as compared to $75 million in the prior-year period. The increase in operating income is primarily due to the absence of $70 million of non-cash impairment charge for an indefinite-lived tradename in the prior year as well as savings from restructuring actions primarily related to the Realignment Plan. These favorable drivers were partially offset by lower gross profit of $19 million, reflecting the impact of lower net sales, additional tariffs and inflation.

Outdoor and Recreation

O&R net sales for the three months ended September 30, 2025 remained relatively unchanged compared to the same period last year, as soft global demand and business exits were partially offset by contributions from product innovations. Changes in foreign currency favorably impacted net sales by approximately $2 million, or 1%.

Operating loss for the three months ended September 30, 2025 was $8 million as compared to $23 million in the prior-year period. The improvement in operating performance was mainly due to higher gross profit of $9 million driven primarily by gross productivity, pricing actions and mix. Savings from restructuring actions also contributed to the improvement in operating performance.

Results of Operations

Nine Months Ended September 30, 2025 vs. Nine Months Ended September 30, 2024

Consolidated Operating Results

NM - NOT MEANINGFUL

Net sales for the nine months ended September 30, 2025 decreased approximately 6%. Net sales were unfavorably impacted by soft global demand across all segments. Business exits, primarily in the H&CS segment also unfavorably impacted net sales. In addition, net sales were also unfavorably impacted by reduced retailer inventory levels primarily in the L&D segment. These unfavorable factors were partially mitigated by launches of product innovations in the H&CS and L&D segments and to a lesser extent in the O&R segment. Changes in foreign currency unfavorably impacted net sales by $37 million, or 1%.

Gross profit decreased by approximately $78 million, or 4% compared to the prior year. Gross margin improved to 34.0% as compared with 33.4% in the prior year. The improvement in gross margin was driven by gross productivity, pricing and lower restructuring-related charges of approximately $24 million, partially offset by the volume impact of lower sales, additional tariffs of approximately $65 million and inflation. Changes in foreign currency exchange rates unfavorably impacted gross profit by $6 million, or less than 1%.

Notable items, other than those noted above, impacting operating income for the nine months ended September 30, 2025 and 2024 were as follows (in millions):

(1) The nine months ended September 30, 2024 includes non-cash impairment charges of $190 million and $70 million for certain indefinite-lived tradenames in the H&CS and L&D segments, respectively. See Footnote 6 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

(2) For the nine months ended September 30, 2025, restructuring-related costs reported in cost of products sold and SG&A were $4 million and $19 million, respectively, and primarily relate to facility closures associated with various discrete initiatives as well as previously announced but substantially completed restructuring activities. For the nine months ended September 30, 2024, restructuring-related costs reported in cost of products sold, SG&A and impairment of other assets were $28 million, $13 million and $6 million, respectively, primarily related to facility closures associated with previously disclosed Network Optimization Project and Project Phoenix, as well as the Realignment Plan and other discrete initiatives. Restructuring costs were $22 million and $40 million for the nine months ended September 30, 2025 and 2024, respectively, primarily related to the Realignment Plan. See Footnote 3 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

(3) Transaction costs and other for the nine months ended September 30, 2025 includes expenses for certain legal proceedings and completed divestitures, costs of a product recall (see Footnote 14 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information), fire-related losses and hyperinflationary currency movements. For the nine months ended September 30, 2024 transaction and other costs primarily related to a release of a bad debt reserve due to a recovery of a receivable from an international customer, hyperinflationary currency movements and accelerated amortization and write-off of other assets associated with integration projects.

Operating income was $311 million as compared to $58 million in the prior year period. The operating results in the prior year period included non-cash impairment charges of $260 million for certain indefinite-lived tradenames in the H&CS and L&D segments. The improvement also reflects the impact of savings from restructuring actions primarily related to the Realignment Plan, lower incentive compensation expense of approximately $53 million, lower restructuring and restructuring-related charges of $18 million and lower amortization of tradenames of $5 million, partially offset by lower gross profit of $78 million and higher advertising and promotion costs of $5 million.

Interest expense, net increased by $14 million due to higher interest rates and lower interest income. The weighted average interest rates for the nine months ended September 30, 2025 and 2024 were approximately 6.3% and 5.8%, respectively.

The loss on extinguishment of debt of $13 million is related to the redemption of the Company’s 4.200% senior notes due 2026 (the “2026 Notes”) during June 2025.

See Footnote 8 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information on interest expense and loss on extinguishment of debt.

Other expense, net for nine months ended September 30, 2025 and 2024 includes the following items (in millions):

During the nine months ended September 30, 2025, the Company sold its equity interest in a joint venture and realized a pretax gain of $12 million.

The income tax provision for the nine months ended September 30, 2025 was $28 million as compared to benefit of $19 million for the nine months ended September 30, 2024. The Company’s effective income tax rates for the nine months ended September 30, 2025 and 2024 were provision of 48.3% and benefit of 10.5% respectively. The increase in the tax rate was primarily driven by decrease in discrete benefits in the current year and lower forecasted pretax book income for 2025. In periods where forecasted pretax income is relatively low, the proportional impact of these items on the effective rate may be significant. See Footnote 10 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

Business Segment Operating Results

Home and Commercial Solutions

NM - NOT MEANINGFUL

H&CS net sales for the nine months ended September 30, 2025 decreased 9%, which reflected soft global demand across all businesses. In addition, net sales were unfavorably impacted by distribution losses in the Commercial business, as well as the timing of retailer orders for relaunched Home Fragrance products and a decrease in the Company’s retail store sales. Business exits also unfavorably impacted net sales by approximately 1%. These unfavorable factors were partially mitigated by launches of product innovations. Changes in foreign currency unfavorably impacted net sales by $32 million, or 1%.

Operating income for the nine months ended September 30, 2025 was $62 million as compared to operating loss of $30 million in the prior year. The improvement in operating results is primarily due to the absence of $190 million of non-cash impairment charge for an indefinite-lived tradename in the prior year and savings from restructuring actions mostly related to the Realignment Plan. These favorable drivers were partially offset by lower gross profit of $87 million, resulting from unfavorable fixed cost leverage associated with lower sales volume, additional tariffs and inflation, partially offset by gross productivity.

Learning and Development

L&D net sales for the nine months ended September 30, 2025 decreased approximately 1%. Net sales in the Writing business decreased primarily due to softer demand, which was partially offset by contributions from launches of product innovations. Changes in foreign currency unfavorably impacted net sales by $6 million, or less than 1%.

Operating income for the nine months ended September 30, 2025 increased to $424 million as compared to $374 million in the prior-year period. The increase in operating income is primarily due to the absence of $70 million of non-cash impairment charge for an indefinite-lived tradename in the prior year as well as savings from restructuring actions primarily related to the Realignment Plan. These favorable drivers were partially offset by lower gross profit of approximately $19 million, primarily due to additional tariffs and inflation, partially offset by gross productivity and pricing.

Outdoor and Recreation

O&R net sales for the nine months ended September 30, 2025 decreased 7% primarily due to net distribution losses, soft global demand and business exits. These declines were partially offset by contribution from launches of product innovation. Changes in foreign currency favorably impacted net sales by $1 million, or less than 1%.

Operating loss for the nine months ended September 30, 2025 was $5 million as compared to $52 million in the prior-year period. The improvement in operating performance was due to higher gross profit of $28 million driven primarily by gross productivity, pricing actions and mix. Savings from restructuring actions and lower amortization of certain tradenames of approximately $5 million also contributed to the improvement of operating income.

Liquidity and Capital Resources

Liquidity

The Company regularly assesses its cash requirements and the available sources to fund these needs. The Company believes the extent of the impact of this rapidly changing retail and consumer landscape, which reflects major retailers’ focus on tight control over their inventory levels, fluctuating interest rates and indirect macroeconomic impacts from geopolitical conflicts as well as recently imposed tariffs by the current U.S. presidential administration, including those most recently announced reciprocal

tariffs, some of which are currently delayed, and countries’ retaliatory actions in response to such tariffs, will continue to be driven by numerous evolving factors the Company cannot accurately predict and which will vary.

For further information, refer to Risk Factors in Part I - Item 1A and Recent Developments in Part II - Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Company's most recent Annual Report on Form 10-K, filed on February 14, 2025.

At September 30, 2025, the Company had cash and cash equivalents of approximately $229 million, of which approximately $205 million was held by the Company’s non-U.S. subsidiaries.

Cash, cash equivalents and restricted cash increased (decreased) as follows for the nine months ended September 30, 2025 and 2024 (in millions):

The Company has historically generated the majority of its operating cash flow in the third and fourth quarters of the year due to seasonal variations in operating results, the timing of annual performance-based compensation payments, customer program payments, working capital requirements and credit terms provided to customers.

Cash Flows from Operating Activities

The change in net cash provided by operating activities reflects higher working capital requirements of the Company due to lapping of prior year reductions, the cash impact of additional tariffs and higher incentive compensation payments in the current year, partially offset by lower restructuring payments.

Cash Flows from Investing Activities

The change in net cash used in investing activities was primarily due to $14 million increase in capital expenditures, partially offset by higher proceeds from the sale of divested businesses and investments.

Cash Flows from Financing Activities

The change in net cash provided by financing activities was primarily due to higher utilization of the Credit Revolver (defined hereafter) during the current period. See Footnote 8 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.

Capital Resources

Credit Revolver

The Company maintains a $1.00 billion senior secured revolving credit facility (the “Credit Revolver”) maturing in August 2027. Under the Credit Revolver, the Company may borrow funds on a variety of interest terms. The Credit Revolver agreement (i) requires the Company to satisfy financial covenants testing the Company’s Collateral Coverage Ratio and Total Net Leverage Ratio (each further defined in the Credit Revolver, as amended), (ii) requires the Company and certain of its domestic and foreign subsidiaries (the “Guarantors”) to guaranty Company obligations under the Credit Revolver and (iii) requires the Company and other Guarantors to grant a lien and security interest in certain assets consisting of eligible accounts receivables, eligible inventory, eligible equipment and eligible intellectual property, and all products and proceeds of the foregoing, subject to certain limitations. Other than outstanding borrowings under the Credit Revolver, availability under the Credit Revolver is subject to change in accordance with the terms of the agreement, including in response to changes in the Company’s pledged collateral value or outstanding letters of credit under the Credit Revolver. At September 30, 2025, there was $932 million of availability

under the Credit Revolver, based on the value of the pledged collateral and prior to giving effect to outstanding borrowings and letters of credit.

The Credit Revolver provides for the issuance of up to $150 million of letters of credit, so long as there is sufficient availability for borrowing under the Credit Revolver. At September 30, 2025, the Company had approximately $35 million of outstanding standby letters of credit issued against the Credit Revolver and $190 million of outstanding borrowings under the Credit Revolver resulting in a net availability of approximately $707 million.

Senior Notes

In May 2025, the Company completed the offering and sale of 8.500% senior notes due 2028. In June 2025, the Company used the proceeds of the offering to fully redeem its 2026 Notes.

Also during the second quarter of 2025, Moody’s and S&P downgraded the Company’s senior unsecured debt rating. As a result, certain of the Company’s outstanding senior notes were subject to interest rate adjustments, with such adjustments to take effect in the fourth quarter of this year.

See Footnote 8 of the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.

The Company was in compliance with all of its debt covenants at September 30, 2025.

Risk Management

From time to time, the Company enters into derivative transactions to hedge its exposures to interest rate, foreign currency rate and commodity price fluctuations. The Company does not enter into derivative transactions for trading purposes.

See Footnote 9 of the Notes to Unaudited Condensed Consolidated Financial Statements for further information on the Company's derivative instruments.

Significant Accounting Policies and Critical Estimates

For further information on significant accounting policies and critical estimates, refer to the Company's most recent Annual Report on Form 10-K, filed on February 14, 2025 and Footnote 1 of the Notes to Unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes from the information previously reported under Part II, Item 7A. in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Item 4. Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to provide reasonable assurance that information which is required to be disclosed by the issuer in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating such controls and procedures, the Company recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

As required by Rule 13a-15(b) of the Exchange Act, the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this Quarterly Report. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2025.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting during the quarter ended September 30, 2025, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Information required under this Item is contained above in Part I. Financial Information, Item 1 and is incorporated herein by reference.

Item 1A. Risk Factors

There have been no material changes in our risk factors from those disclosed in Part I, Item 1A. of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities

Issuer Purchases of Equity Securities

The following table provides information about the Company’s purchases of equity securities during the three months ended September 30, 2025:

(1) Shares purchased during the three months ended September 30, 2025 were acquired by the Company based on their fair market value on the vesting date in order to satisfy employees’ tax withholding and payment obligations in connection with the vesting of awards of restricted stock units.

Item 5. Other Information

None of the Company’s directors and officers adopted, modified or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company’s fiscal quarter ended September 30, 2025.

Item 6. Exhibits

Exhibit Number Description of Exhibit

| ITEM 31 — RULE 13a-14(a)/15d-14(a) CERTIFICATIONS | |

31.1† Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2† Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ITEM 32 — SECTION 1350 CERTIFICATIONS | | 32.1† Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2† Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ITEM 101 — INTERACTIVE DATA FILE | | 101.SCH XBRL Taxonomy Extension Schema 101.CAL XBRL Taxonomy Extension Calculation Linkbase 101.DEF XBRL Taxonomy Extension Definition Linkbase 101.LAB XBRL Taxonomy Extension Label Linkbase 101.PRE XBRL Taxonomy Extension Presentation Linkbase (104) Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

† Filed herewith.

• Represents management contracts and compensatory plans and arrangements.