NEW YORK, Aug. 11, 2018 (GLOBE NEWSWIRE) -- Pomerantz LLP announces that a class action lawsuit has been filed against Newell Brands Inc. (“Newell” or the “Company”) (NYSE: NWL) and certain of its officers. The class action, filed in United States District Court District of New Jersey, and docketed under index 18-cv-11132, is on behalf of a class consisting of investors who purchased or otherwise, acquired Newell Brands securities, between February 6, 2017 and January 24, 2018, inclusive (the “Class Period”), seeking to pursue remedies under the Securities Exchange Act of 1934 (the “Exchange Act”) against Newell Brands and certain of its senior officers (collectively, “Defendants”).
If you are a shareholder who purchased Newell Brands securities between February 6, 2017, and January 24, 2018, both dates inclusive, you have until August 20, 2018, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com . To discuss this action, contact Robert S. Willoughby at rswilloughby@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
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Newell Brands is a global manufacturer and marketer of name brand consumer and commercial products that are sold in nearly 200 countries around the globe.
In April 2016, the Company then named Newell Rubbermaid, acquired Jarden Corporation (“Jarden”). Following the acquisition of Jarden, the Company was renamed Newell Brands.
The Complaint alleges that throughout the Class Period, Defendants used the term “core sales,” a non-GAAP financial measure, to explain Newell Brands results to stockholders and the investment community, as well as to internally evaluate and manage the Company’s business. According to the Company’s earnings press releases during the Class Period, Defendants believe that the term “core sales” provided investors with a more complete understanding of Company sales trends by “providing sales on a consistent basis as it excludes the impacts of acquisitions [other than the Jarden acquisition, which it included in the core sales measure on a pro-forma basis starting in the second quarter of 2016], planned or completed divestitures, the deconsolidation of the Company’s Venezuelan operations and changes in foreign currency from year-over-year comparisons.” In addition, Defendants misled investors about the synergies associated with newly acquired Jarden. Although the legacy Newell Brands and Jarden businesses looked similar on paper, unbeknownst to investors, they were operated in completely different fashions, with legacy Newell Brands employing a highly centralized model, while Jarden utilized a highly decentralized, more entrepreneurial model. This undisclosed difference in managerial style and culture caused significant internal discord that had a material adverse effect on the Company’s operating performance during the Class Period.
When Defendants announced the Company’s 2017 third quarter results on November 2, 2017, they disclosed, during their earnings call, that Newell Brands’ “disappointing outcome” and materially lower core sales growth (0.4% versus Wall Street estimates of 2.9%) were due to “retailers pull[ing] back on order rates and rebalanced inventories” to help clear the known, but previously undisclosed, bloated build-up of Newell Brands inventory in its retail channel. Indeed, retailers dramatically reduced product re-order rates even though Defendants stated that retailers experienced 3.5% sellout growth, thereby demonstrating the extent to which Defendants had loaded up the retail channel with Newell Brands products.
On November 2, 2017, in response to this news, the price of Newell Brands stock fell approximately 27%, or $10.99 per share, on heavy trading volume to close at $30.01 per share.
On January 25, 2018, Newell Brands issued a press release pre-announcing its 2017 results. The Company stated that it anticipated 2017 core sales growth of approximately 0.8% versus previous guidance 1.5% - 2.0% (implying negative 2.0% organic sales growth during the 2017 fourth quarter). The press release further noted that “the[C]ompany’s core sales results were impacted by an acceleration of the gap between sell-in and sell-through results due to a continuation of retailer inventory rebalancing in the U.S. and the bankruptcy of a leading baby retailer [Toys“R”Us].” Newell Brands’ press release also announced that the Company was exploring “strategic options” to significantly restructure its business by divesting industrial and commercial assets. Newell Brands stated that this action was expected to result in a 50% reduction in both the Company’s customer base and its global factory and warehouse footprint. That same day, Newell Brands issued a press release announcing that three members of its Board had resigned.
In response to these disclosures, the price of Newell Brands stock fell approximately 21%, or $6.42 per share, on heavy trading volume to close at $24.81 per share on January 25, 2018.
The Pomerantz Firm, with offices in New York, Chicago, Florida, and Los Angeles, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com
CONTACT: Robert S. Willoughby Pomerantz LLP rswilloughby@pomlaw.com
