Newell Rubbermaid announced its second quarter 2015 financial results. Net sales were $1.56 billion compared with $1.5 billion in the prior year.
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Core sales grew 5.1 percent, excluding a 480 basis point net contribution from acquisitions and planned divestitures and a 600 basis point negative impact from foreign currency.
Reported gross margin was 39.8 percent, a 20 basis point improvement versus prior year.
Normalized gross margin improved 10 basis points to 40.0 percent, as benefits from productivity and pricing more than offset the negative impacts of foreign currency and mix from acquisitions.
Second quarter reported operating margin was 13.8 percent and operating income was $214.7 million, compared with 14.2 percent and $213.3 million, respectively, in the prior year.
Normalized operating margin was 16.0 percent, flat compared with the prior year despite a 150 basis point increase in advertising and promotion expense.
Normalized operating income was $249.4 million compared with $239.7 million in the prior year as the benefits of Project Renewal and other cost savings initiatives more than offset increased investment in advertising and promotion and pressure from foreign exchange.
The reported tax rate for the quarter was 22.7 percent compared with 25.8 percent in the prior year. The normalized tax rate was 24.5 percent compared with 27.2 percent in the prior year.
Normalized net income was $174.5 million compared with $165.5 million in the prior year. Normalized diluted earnings per share were $0.64, an increase of 8.5 percent versus $0.59 in the prior year.
The improvement in normalized diluted earnings per share was attributable to increased core sales, contribution from prior year acquisitions, gross margin expansion, a lower tax rate and the positive impact of fewer outstanding shares, which more than offset a significant increase in advertising and promotion support, negative foreign currency impacts and increased interest expense related to borrowing in support of prior year acquisitions.
Reported diluted earnings per share were $0.55, compared with $0.54 per diluted share in the prior year. Reported net income was $148.5 million, compared with $150.6 million in the prior year.
In addition to the factors cited in the explanation of normalized diluted earnings per share, reported diluted earnings per share were negatively impacted by higher incremental restructuring and other Project Renewal transformation costs in 2015.
Operating cash flow was $102.5 million compared with $96.2 million in the prior year period. ■