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Energizer Holdings, Inc. announced results for its third fiscal quarter of 2012 ended June 30, 2012. Net earnings for the quarter were $70.2 million, or $1.06 per diluted share, as compared to net earnings of $65.9 million, or $0.94 per diluted share, in the third fiscal quarter of 2011.
"Adjusted diluted earnings per share for the quarter were generally in line with our expectations," said Ward Klein, Energizer Holdings CEO. "Top line sales, however, were down across both segments. Battery category volume softened, our market share in the battery category was negatively impacted by decreased shelf space and display activities primarily at a key customer, competitive activity in personal care has intensified late in the quarter, and both divisions were impacted by weakening global currencies. In personal care, we remain pleased with the results of our Hydro launches across men's and women's segments and while our sales versus the prior year were down in most other product lines, our competitive position and market shares remain stable. We expect improved fourth quarter diluted earnings per share versus 2011 driven primarily by planned reductions in advertising and promotional programs, and we reaffirm our outlook of $6.00 to $6.20 per diluted share for fiscal 2012. While we are maintaining our earnings estimate for fiscal year 2012, the growth outlook has become more challenging due to increasingly weak battery category trends, heightened competitive activity and softening economic conditions.
" To ensure operating flexibility in a challenging environment and deliver the returns expected by our shareholders, we are undertaking a comprehensive, enterprise-wide review of our organization's operating model. We will provide an update of our assessment and the potential implications for charges and savings in our fourth quarter earnings release in November in conjunction with our initial financial outlook for fiscal 2013," Klein concluded.
For the quarter, net sales decreased 8.9% on a reported basis as compared to the prior year quarter, including a decrease of $28.7 million, or 2.3%, due to unfavorable currency in Europe and, to a lesser extent, Latin America. Organic sales declined 6.6% due, in part, to lower reported net sales in personal care due, with lower sales in legacy men's and women's systems, disposables, Schick Hydro manual razors, and heightened competitive activity, partially offset by sales of Hydro Silk and growth of Hydro replacement cartridges.
Specifically for the company’s personal care division, for the quarter, net sales decreased 7.1%, and organic sales declined 5.1% as compared to the same period in the prior year. The drivers of the organic sales decline included that Wet Shave net sales decreased 8% on a reported basis, and 5% excluding the impact of unfavorable currencies. Increased sales of Schick Hydro refills, Hydro 5 Power Select and Hydro Silk were more than offset by lower sales across the other segments. Also net sales in skin care decreased approximately 6% due to higher trade investment and unfavorable product mix. In the U.S., unit volumes of Banana Boat and Hawaiian Tropic increased despite a comparatively high prior year third quarter and a high second fiscal quarter of 2012, and net sales in infant care decreased approximately 12% due to category softness, heightened competitive activity and higher promotional and trade support behind bottles.