It’s reporting season for major players in the stationery space.

 

Single-digit Q4 decline at Avery

Avery posted an organic sales decline of 2.8% in the fourth quarter of 2023.

 

Canada-based parent company CCL has reported its Q4 and FY 2023 earnings, with fourth quarter revenue at Avery coming in at C$242.1 million (US$180 million). As reported, this was an increase of 1% year on year; however, the positive impact of acquisitions (+1.9%) and currency (+1.9%) resulted in the organic decrease.

 

In his earnings commentary, CCL CEO Geoff Martin said: “Avery posted strong fourth quarter gains in direct-to-consumer categories, while progress in the horticultural businesses offset declines in the smaller Canadian and Australian markets.”

 

Steady year for Newell’s Writing unit

Newell’s Writing division revenue in 2023 was US$1.72 billion, down 1.7 per cent.

 

The Writing result was a resilient one given that Newell’s company-wide sales in 2023 fell by a reported 14 per cent to US$8.1 billion. 

 

Newell has a lot of exposure to Walmart, its largest client that accounts for around 15 per cent of total revenue.

 

Pressures on revenue and earnings have led to significant cost-reduction actions in the past couple of years, including the recently announced “organisational realignment”. 

 

While Newell reduced debt by US$500 million in 2023, its total debt of US$4.9 billion continues to be a concern in financial circles. 

 

This change to the capital structure has led to recent downgrades by ratings agencies Moody’s and S&P Global. In its latest report, Moody’s said that Newell would continue to be pressured by weak consumer demand over the next 12-18 months. It added that the company is also facing execution risk on implementing its strategy of prioritising investments in its top 25 brands and top ten countries, which represent about 90 per cent of sales.

 

It should be noted that Moody’s did not suggest Newell was on the verge of collapse or its situation was calamitous. In fact, it referred to the company’s “adequate liquidity” and believes its high leverage ratio will “decline materially” as actions to improve operating efficiency and margins take hold.

 

For more on this story and other global news from OPI, go to https://www.opi.net/news/region/001-north-america/steady-year-for-newell...