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Earnings Down in Financial Report for Q1 2013 from Energizer
Posted: January 31, 2013
Energizer Holdings, Inc. announced results for the first fiscal quarter ended December 31, 2012. Net earnings for the quarter were $129.8 million, or $2.07 per diluted share, as compared to net earnings of $143.8 million, or $2.15 per diluted share, in the first fiscal quarter of 2012. Average diluted shares outstanding were 62.6 million for the first fiscal quarter of 2013, down 4.3 million shares as compared to the same quarter in the prior fiscal year due to the timing of share repurchases in fiscal 2012.
"Earnings for the quarter slightly exceeded our expectations," said Ward Klein, CEO of Energizer Holdings. "Despite top-line challenges in our personal care division due to heightened competitive promotional activity, our Hydro franchise continues to grow and to show strong repeat purchases. Furthermore, we have several innovative products that are launching this quarter that we anticipate will positively impact the top-line growth in fiscal 2013. In addition, our restructuring plans remain on track to achieve $25–35 million in savings for fiscal 2013. We are maintaining our fiscal 2013 financial outlook range for adjusted diluted earnings per share of $6.75–7.00, including estimated net cost savings from our restructuring efforts in fiscal 2013, but excluding restructuring costs."
For the quarter, Energizer’s personal care division’s net sales decreased 1.8% including the unfavorable impact of currencies. Organic sales declined 1.4%. Wet shave net sales decreased 3.9% on a reported basis, and 3.3% operationally in the quarter. Sales of Schick Hydro men's systems continued to grow, up 26% in the quarter, on higher refill volume, higher Schick Hydro Power razor sales and lower promotional spending. Additionally, incremental Schick Hydro Silk sales offset the sales decline in legacy women's systems in the quarter. These increases were more than offset by sales declines in disposables, men's legacy systems and shave preps due, in part, to heavy competitive promotional activity, and
Collectively, all other personal care product categories increased 3.8% on a reported basis, and 3.6% operationally in the quarter, which partially offset the decline in wet shave. The key drivers of the increase in the product categories other than wet shave were higher shipments in skin care, feminine care and Litter Genie. These sales gains were partially offset by lower sales in infant care due to continued category weakness and competitive activity.
Overall, the company's financial outlook for adjusted, diluted earnings per share remains in the range of $6.75–7.00 for fiscal 2013. Within personal care, sales expectation remains consistent with the initial financial outlook in November, which was mid-single digit sales growth driven by innovation across categories, especially in wet shave and skin care.