Retailers are cutting fall orders more than expected, says consumer goods supplier Newell Brands Inc.
said Wednesday, a sign that traders are stepping up efforts to reduce their bloated inventories.
The distributor of Sharpie markers, Yankee Candle and other consumer products has cut its sales outlook for the third quarter and for the year, and now expects sales to decline from a year ago, when retailers were hoarding depleted inventory at the start of the pandemic and manufacturers were scrambling to ramp up production.
The consumer market has changed dramatically this year, with high inflation reducing spending and shoppers shifting away from certain goods in favor of travel and services. Retailers including Walmart Inc.,
and Macy’s Inc.
who have pushed orders forward to circumvent supply chain disruptions are offering discounts on certain products, seeking to dispose of excess inventory to off-price outlets and canceling orders with overseas suppliers.
Order reductions indicate retail supply chains are retrenching as fall approaches, when a series of shopping events from back-to-school through the holiday season typically drive a surge shipping request. This year, however, freight volumes are teetering and data from the shipping industry shows transport prices are falling as capacity now exceeds demand.
The Global Port Tracker report released by the National Retail Federation and Hackett Associates said import volumes at major U.S. ports fell 0.4% in July from a year earlier, and the group of Distribution forecast August container imports to be down 4.3% from August. 2021.
“While we remain excited about the back-to-school season and continue to see solid growth in retail activity, we have seen a significantly larger than expected decline in retail orders and continued inflationary pressures on the consumer.” , said the head of Newell Brands. said executive Ravi Saligram.
The company said it now expects to end the third quarter with net sales of between $2.21 billion and $2.32 billion, down from its previous forecast of $2.39 billion at $2.5 billion.
For 2022, Newell expects net sales in the range of $9.37 billion to $9.58 billion, also down from the previous forecast of $9.76 billion to $9.98 billion. dollars, he said.
The new outlook would also represent a drop in sales from the prior year periods, when it showed sales of $2.8 billion and $10.6 billion for the third quarter of 2021 and the set of 2021, respectively.
Last month, the company said it would spend more to improve its supply chain this year to reduce shipping costs and ease pressures ranging from port congestion to production delays.
Newell shares were down about 0.8% in Wednesday afternoon trade at $16.93.
Write to Sabela Ojea at [email protected]
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