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Consumer goods maker Newell Brands said on Tuesday it would cut its revenue and profit outlook for the full year and next quarter as retailers cut spending to manage excess inventory.

Pen maker Sharpie said it now expects third-quarter net sales to be between $2.2 billion and $2.3 billion, down from a previous sales forecast of 2.39 to 2, $5 billion.

Full-year sales are expected to be between $9.37 billion and $9.58 billion, compared to previous guidance of a range between $9.76 billion and $9.98 billion.

The company also cut its earnings forecast and expects to earn $1.56 to $1.70 per share instead of $1.79 to $1.86 per share for the full year. That’s below analysts’ expectations for annual earnings of $1.87 per share, according to a Refinitiv poll.

“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 Ravi Saligram, Newell’s chief executive.

Shares of the company fell 4.6% in aftermarket trading.

Persistent inflation has prompted some budget-conscious consumers to adjust their spending habits, which has left retailers with excess inventory in recent months that has weighed on margins and reduced profits. Target struggled to manage excess inventory and said it had to offer discounts to empty its shelves, which led to a bigger-than-expected decline in second-quarter profits.

As a result, retailers have cut spending, but Saligram said the company plans to take steps to “mitigate” those challenges by tightening its “belt on cash and cost management” and adjusting its business plan. supply.

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