(Reuters) - Shares of Newell Brands Inc (NWL.N) lost almost a quarter of their value on Thursday after the Sharpie pen maker recorded dismal quarterly results from weak back-to-school demand and the Toys “R” Us bankruptcy, and cut its full-year forecast.
A drop in orders for stationery, including pens and Papermate color pencils, during the back-to-school season and the sale of some of its businesses drove Newell’s sales down 7 percent in the third quarter, the company said.
“For the first time in many years, market growth at back-to-school was weak resulting in minimal September replenishment orders and significant inventory destocking,” the company said in a statement.
Newell said payments owed to the company were hurt by the bankruptcy of Toys “R” Us, one of its top-ten customers, where it sells Graco strollers.
The company said it expected its baby product sales in the holiday quarter to be hit largely by the liquidation of inventories by Toys “R” Us during its restructuring.
Newell cut its full-year profit forecast to $2.80 to $2.85 per share from $2.95 to $3.05 it had previously estimated.
It also said sales would now be between $14.7 billion and $14.8 billion, compared with its previous estimate of $14.8 billion-$15 billion.
The company posted a quarterly profit of 86 cents and revenue of $3.7 billion, that both missed Wall Street forecasts.
Newell shares, which fell to their lowest in more than three years, were also top percentage losers on the S&P 500 index .SPX.
Reporting by Vibhuti Sharma in Bengaluru; Editing by Anil D'Silva