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Personal Care Sales Drop Pulls Down Energizer Holdings' Results
Posted: January 29, 2014
Energizer Holdings, Inc.—owner of the Banana Boat and Hawaiian Tropic sun care brands and the Schick, Skintimate, Edge and other shave brands—announced results for the first fiscal quarter, which ended December 31, 2013. The company reported net earnings per diluted share of $1.71, a decrease of 17.4% and adjusted net earnings per diluted share of $2.10, down 4.5%, compared to the prior year first fiscal quarter. And net sales for the fiscal first quarter were $1.113 billion, down 6.6%.
"First quarter adjusted net earnings per diluted share were in-line with expectations as lower spending and accretion from the recently acquired feminine care brands helped offset organic top-line softness," said Ward M. Klein, Energizer Holdings’ CEO. "However, we were disappointed by the sluggish top-line performance within our personal care division. We believe heightened promotional activity over the past year has adversely impacted first quarter consumer demand and overall category volumes. In addition, our results were negatively impacted by unfavorable global currencies, and pricing controls and import restrictions in certain Latin American countries. We believe that many of these unfavorable trends will continue at least through the first half of our fiscal year. Despite these headwinds, we remain committed to maintaining our planned investment levels in support of our brands. As a result, we have modified our full year adjusted net earnings per diluted share outlook to $7.00 to $7.25.”
For its personal care division, Energizer Holdings reported a net sales drop of 0.7% for the first fiscal quarter, and organic net sales down 6.1%. Segment profit was $130.3 million, up 12.1%, or up 8.9% excluding currencies and the incremental impact of the feminine care acquisition, and incremental net sales and segment profit from the feminine care acquisition totaled $44.1 million and $13.7 million, respectively, excluding the acquisition inventory valuation adjustment and acquisition/integration costs.
Organic net sales in the first fiscal quarter decreased 6.1% due primarily to soft U.S. category trends in substantially all of the personal care categories in which the company competes, pricing controls and import restrictions in certain Latin American countries and lapping prior year innovation launch volumes in North America.
Segment profit in the first fiscal quarter increased $14.1 million inclusive of the negative impact of currencies and the incremental impact of the feminine care acquisition. Excluding the impact of unfavorable currencies and the incremental impact of the feminine care acquisition, segment profit increased 8.9% as a result of lower A&P spending due to the timing of promotions and product launches as compared to the prior year and continued spending favorability driven by the company's cost savings initiative.