Newell Brands (NASDAQ:NWL) is showing signs of a solid turnaround, as the company's shares surged by 24% following an updated profit outlook for FY24. Even with Q3 sales dipping 4.9% to $1.9 billion, Newell's strategic overhaul is gaining traction, highlighted by CEO Chris Peterson's focus on margin growth and debt reduction. The gross margin climbed to 34.9%, the highest level since 2020, underscoring the company's commitment to driving operational efficiency despite a challenging economic environment. The stock's premarket boost signals growing investor confidence in Newell's ability to execute its multi-year transformation.

• Warning! GuruFocus has detected 5 Warning Signs with NWL.

Under the revamped strategy, Newell achieved a notable jump in normalized operating margins, reaching 9.5% compared to last year's 7.4%, fueled by aggressive cost-cutting and productivity gains. While the Learning & Development segment saw growth, other areas like Home & Commercial Solutions struggled, reflecting ongoing market pressures. Yet, the overall momentum suggests that Newell's relentless focus on optimizing its operations is paying off, laying a stronger foundation for long-term profitability and competitiveness in the consumer goods space.

Looking ahead, Newell has raised its profit forecast, projecting full-year earnings per share to land between $0.63 and $0.66, up from the previous range. With an improved cash flow outlook targeting $500 to $600 million, the company is gearing up for a stronger financial position to weather future uncertainties. The moves reflect Newell's strategic pivot toward a leaner, more resilient business model as it seeks to capture market share and boost investor returns amidst a tough economic landscape.

This article first appeared on GuruFocus.