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Shares of Newell Rubbermaid fell sharply Monday on news the company was trimming its fourth-quarter and full-year sales targets. The company now sees fourth-quarter sales growth coming in flat, down from the 2% increase previously expected, and full-year sales increasing only 3.0-3.5% instead of the previous 4.0% target. Despite the anticipated softer sales, the company maintained its previous EPS guidance, apparently signalling it will continue to repurchase its shares. Weak North American office product demand and the inventory reductions at key large retailers were the main reasons for the lower sales outlook. "While this inventory correction by North American office retailers poses a near-term challenge, we remain confident in our ability to drive long-term sales growth," said CEO Mark Ketchum. Newell Rubbermaid raised the lower-end of their gross-margin expansion guidance to 2-2.25% from 1.75-2.25%, the upside being driven by an improved product mix.

Citigroup analyst Wendy Nicholson was positive about the announcement: "While some might be discouraged by NWL’s revision this morning, we are in fact encouraged that NWL is able to offset pressure to their top line through cost savings initiatives and a positive mix shift that are allowing the company to deliver on the bottom line," she told investors, adding shares are, in her opinion, undervalued. Shares of the company slumped 6.7% to $26.75 in midday trading Monday.

Sources: Press release, MarketWatch
Commentary: Newell Rubbermaid: New Initiatives Should Propel Growth
Stocks to watch: NWL. Competitors: AVY, FO

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Source: Newell Rubbermaid Lowers Sales Forecasts