Newell Brands, Inc. (NWL) Accused of Hiding Truth Behind Bloated Retail Inventory Levels

According to the complaint, Newell Brands, Inc. (NWL) failed to disclose that the company's retail channel was loaded with extremely high levels of unsold product, which made it more likely that the company would experience slower sales growth. In addition, Newell's business fundamentals were not improving as Newell officials claimed and internal discord was contributing to the adverse effect on the company's operating performance. Newell's troubles began to emerge on November 2, 2017, when the company announced that net sales declined by 7%, admitting that 2017 third quarter results were below expectations due to weak "late-quarter sales" related to retail inventory rebalancing. Then, on January 25, 2018, Newell announced that the company was considering a divestiture that would result in a 50% reduction in both Newell's customer base and its global factory and warehouse footprint. On this news, Newell's stock fell nearly 21% to close at $24.81 per share on January 25, 2018, and has yet to recover from this decline.

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