Ravi Saligram
President and Chief Executive Officer at Newell Brands
Thank you, Sofya. Good morning, everyone, and welcome to the New Newell on our first quarter call. We are pleased with the strong start to 2022. Building on the momentum from the prior quarters, as our team remains laser-focused on executing with excellence in a challenging environment. Core sales grew 6.9% against a difficult 20.9% comparison. While normalized operating income and normalized earnings per share increased 10.4% and 20%, respectively, despite significant ongoing inflation. This demonstrates the power of our diversified portfolio and the nimbleness of our model. We're significantly better today at leveraging our brands to scale growth and efficiency.
Our strategy is working. And we have put a strong foundation in place for sustainable and profitable growth. Q1 marked the seventh consecutive quarter of core sales growth for your brands. In Q1, our core sales growth was driven by pricing as volume was relatively flat. Core sales grew in five of seven business units, including food, driving Outdoor & Recreation, Baby and Commercial. The Outdoor & Recreation and Food businesses led the charge with double-digit increases versus the prior year period despite difficult comparisons. Home Fragrance and Home Appliances declined in the first quarter as they lapped a significant surge in demand in the year ago period due to the pandemic and the passage of stimulus in the U.S., importantly, on both a two-year and three-year stack basis, core sales increased in the double-digit range for all seven business units a fantastic achievement.
As we shared last quarter, given the ongoing supply chain challenges that have beset the industry, retailers accelerated orders of seasonal products into the first quarter, particularly in the Outdoor & Recreation and Writing businesses, which contributed to the strong top line results. We are proud of the fact that we were able to fulfill these orders despite external obstacles, showing the team's resilience and agility as well as the power of One Newell as anticipated. We experienced normalization in category and consumption trends relative to last year, which was turbocharged by the stimulus in the U.S. while domestic POS was below the elevated year ago base. It remained well ahead of 2019 and 2020 levels, showing that the behavioral shifts we have seen through pandemic are enduring.
Our diverse all weather portfolio is well positioned to capitalize on the evolving consumer trends surrounding hybrid work, Homes hub as well as increased focus on well-being, outdoor activities and sustainability. We continue to sharpen brand positioning, enhance our marketing and innovation muscle and improve our execution in the marketplace, substantially strengthening our iconic purpose-driven brands. These actions have unlocked another quarter of strong growth from many of our largest brands such as Coleman, Breo, Rubbermaid, Rubbermaid Commercial Products, Sharpie, Paper Mate. 14 of our top 20 brands grew in Q1 versus last year.
We are continuing to elevate the digital IQ of the organization and believe our early investments behind omnichannel execution are driving stronger connections with our customers and consumers. In early April, we launched a new creative kitchen in Hoboken, New Jersey, which is a new dream kitchen space and inspiration incubated and also up a steady stream of recipes and tips connecting people with the latest kitchen innovations, food and kitchen trains. Together with our partner, we will produce cutting-edge and inspiring content for all digital platforms, showcasing our innovations, hosting live events with the studio audience and partnering with influencers and customers to engage with media.
This is really exciting. This is a great way to showcase our new and differentiated innovations and food and appliances that satisfy consumers' unmet needs. One such product is the recently launched Rubbermaid Dura-Lite Bakeware, an all-in-one bakeware solution of broiling, baking, freezing, serving and storage. Innovation is the lifeblood of every consumer products company, and we have been hard at work reigniting this growth engine at Newell brands, leveraging consumer shop insights, foresights analytics and latest growths. From a geographic perspective, core sales in North America great nearly twice the rate of international markets as EMEA softened against a difficult comparison and the impact on consumer sentiment from the unfortunate war in Ukraine.
Let me now shed some light on business unit results, starting with [Indecipherable], where we saw continued momentum, both in our top line and market share as the fundamentals remain in excellent shape. Core sales grew for the fifth straight quarter, mapping a strong double-digit Increase in the year ago period driven by North America, Latin America and Asia Pacific. While the commercial/office channel still remains below pre-pandemic levels, we're winning there as well, and we are seeing year-over-year growth in this channel as people return to offices, albeit in a hybrid environment. Writing and creative expression blew and fine writing all grew in the quarter, helping to offset the decline in legging due to chip shortages.
Given the ongoing supply challenges across the industry, retailers accelerated some of their back-to-school orders into Q1, which contributed to the strong results. We believe we are well positioned for the upcoming back-to-school season and we'll have strong merchandising plans in place to capture consumer demand. In Baby, the core sales increase was driven by North America and APAC markets. From a category perspective, both baby gear and Baby Care grew core sales even as the business lapped a double-digit comp that was aided by the stimulus in the U.S. This is particularly impressive given the pervasive supply challenges that have been pressuring availability of products.
Food delivered an excellent quarter. Core sales grew at a low double-digit pace, even as it lapped a very difficult double-digit year ago comparison, reflecting strong growth across the fresh preserving, cookware and bakeware, as well as food storage and kitchen organization categories. March marked the largest global sales in over five years for fresh preserving, a fantastic result, fueled by strong consumption and innovation. This business goes from strength to strength, and our teams continue to leverage favorable trends and new product launches to draw consumers into this category even as mobility continues to improve, and more people are returning to work in office. Kitchen remains an integral part of consumers' lives.
In the context of a hybrid work environment and a highly inflationary backdrop, we believe that food consumption at home will remain ahead of pre-pandemic levels with our leading brands well positioned to capitalize on these trends. Home Fragrance core sales and consumption declined against a record first quarter performance a year ago. This pandemic-driven demand and category trends have slowed down as expected. Modest core growth in EMEA was not enough to offset declines in North America. On a two- and three-year stack basis, core sales grew in the strong double-digit rate. Similar to home appliances, we expect the category to continue to normalize through the balance of the year, but feel good about brand health and new product pipeline, both within and outside the Cambro category.
Core sales growth for home appliances declined low single digits as the business lapped a significant surge in consumption last year when it grew nearly 39%. Hard core sales in Latin America were more than offset by declines in other regions. Both two- and three-year STACK core growth rates were in the strong double-digit range. Given the challenging comparisons, we expect a slowdown in consumption to continue in this category as shopping behavior normalizes. The Outdoor & Recreation business continued its excellent momentum and still the show once again as core sales increased 22.9% on top of 7% in the year ago period with Q1 marking the fifth consecutive quarter of growth.
The strong performance was broad based across all regions and major businesses driven by retailer optimism regarding the upcoming season with outdoor participation expected to remain robust. Our customers place some of their orders for outdoor equipment earlier than usual due to the unpredictable supply chain environment and the seasonal nature of the category. Strong top line and share momentum in the beverage business persisted in Q1 as our innovation and brand-building efforts behind Contigo and bubba continue to gain traction with the category further benefiting from increasing consumer mobility. Core sales growth for the Commercial business accelerated to 7.4% against its toughest comparison of the year, led by North America and Latin America.
Strong momentum in the quarter was supported by pricing. We're also seeing improved product availability and view our portfolio diversity across both commercial and retail verticals as an advantage. Commercial cleaning, material handling, refuse and recycling, outdoor and organization and washroom were the major drivers of cross sales growth, helping to offset softness in disposable lows, which are lapping a high base period due to COVID. We're encouraged by strong order book and believe that return to office bodes well for the commercial categories. The external environment has remained quite difficult in the first quarter as prevailing headwinds surrounding supply chain and inflation were further exacerbated by the unfortunate war in Ukraine.
Even as inflationary pressures have gotten more onerous than we previously anticipated due to the ongoing political situation and its impact on cost are resolved to restore gross margin and drive operating margins remain higher than ever. Despite the significant impact from inflation, Newell's normalized operating margin improved about 50 basis points versus last year, ahead of our expectations, largely reflecting incremental pricing actions and stronger management of overhead costs. We are proceeding swiftly with mitigating actions, giving us confidence to reiterate our outlook for the year, in spite of about $80 million of incremental inflation.
We still expect 2022 to be a year of margins even though inflation has continued to move against us. Our outlook calls for top and bottom line growth despite a challenging and uncertain macro backdrop. For 2022, we remain focused on five key priorities: first, improving gross margins as we continue to double down on our efforts to offset the significant inflationary pressures and supply chain challenges while improving customer service levels. The strength of our brands has allowed us to take the appropriate pricing actions on all of our businesses while ensuring they remain a good value for consumers. In addition, we'll continue to optimize commercial spend, price innovation to be gross margin accretive, direct A&P spend towards higher gross margin categories and drive productivity.
Second, continue to drive core sales growth and innovations focus on mastering the 360-degree consumer and shopper journey and delight consumers and customers at each touch point and shoppers at each touch point with compelling storytelling focused on consumer value and brand uniqueness. We will capture consumer demand by directing A&P to the brands with the highest margins and growth potential and target appropriate consumer segments to maximize conversion. Third, are turbocharge international to accelerate growth in profits. Fourth, continue investing in transforming our supply chain through Project Albian automation.
And last but not least, continue to strengthen the One Newell culture and build on our employee engagement momentum. We remain committed to driving sustainable and profitable growth and building operational excellence throughout the organization while being a force booked good. We recently announced a carbon neutrality goal by 2040, for all Scope one and Scope two emissions. We'll also continue to address existing macro headwinds and forge ahead with our strategic initiatives, such as Project Albin, Automation and realizing the potential of International. Strong results in Q1 are building on our track record of following through with our commitments, and we are confident in our outlook for 2022.
I am thankful to our employees for always rising to the occasion and helping us to successfully navigating through the ever-changing operating environment. I continue to believe that Newell's best days are ahead of us, and we have a significant opportunity to drive shareholder value, onwards and upwards.
And now I'll turn it over to Chris.