Blaming the apparently stalling economic recovery, Newell Rubbermaid (NWL) slashed its full-year guidance on Friday, sending the companys stock tumbling more than 10%.
The Atlanta-based maker of Rubbermaid, Sharpie and Paper Mate blamed the gloomier guidance on slower spending in the U.S., which has suffered an onslaught of alarming economic reports in recent weeks.
Persistent softness in the U.S. economy and increased inflationary pressure have caused us to revise our outlook for the balance of the year, CEO Mark Ketchum said in a statement.
Newell Rubbermaid said it expects to post a non-GAAP profit of $1.60 to $1.67 a share, down from $1.67 to $1.70 earlier. Even the most optimistic end of that new range would trail the Streets view of $1.69.
Core sales are seen rising just 3% to 4% for the full year, down from 4% to 5% previously. The company sees gross margins in 2011 increasing by 0.4 to 0.6 percentage points, down from 0.50 to 0.75 percentage points.
Further, Newell Rubbermaid said it anticipates its second-quarter results badly missing Wall Streets expectations, perhaps by as much as 15%.
Several of our large retail customers are revising downward their U.S. growth expectations for the year, Ketchum said, pointing to weak consumer confidence levels and lower-than-expected spending trends, particularly in the semi-discretionary categories in which we compete.
Shareholders expressed their dismay, sending Newell Rubbermaids stock dropping 10.49% to $15.22 Friday morning. Those losses left the stock down 6.6% in 2011 and flat over the past 52 weeks.
Newell Rubbermaids lowered guidance could be the first of many released as corporate America seeks to brace shareholders for the slowing U.S. economy. Underscoring the growth concerns, the Labor Department said Friday the U.S. created a meager 54,000 jobs in May about a third as much as economists had forecasted and the worst reading since September.
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