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Energizer Climbs to $84.9 Million in Net Earnings for Quarter
Posted: May 1, 2013
Energizer Holdings, Inc. announced results for the second fiscal quarter ended March 31, 2013. Net earnings for the quarter were $84.9 million, or $1.35 per diluted share, as compared to net earnings of $77.9 million, or $1.17 per diluted share, in the second fiscal quarter of 2012. "We are pleased with second quarter earnings and the progress we have made on our cost reduction initiatives, which are tracking ahead of plan," said CEO Ward Klein. "We experienced flat organic sales in the quarter as modest top line growth in personal care was offset by declines in household products. The growth in personal care was negatively impacted by extraordinary competitive promotional activity, which we believe contributed to overall category deflation. Despite these top line challenges, operating margin improvement delivered strong growth in earnings per share versus the prior year quarter.
"Given the significant progress on our 2013 restructuring project, we have revised our fiscal 2013 gross savings estimate to $50–60 million from our original estimate of $25–35 million. For the total project, gross savings have been increased to $225 million from the original estimate of$200 million. We plan to reinvest these incremental total project savings in support of our business, netting to the previously announced $150 million in net savings by 2015. Nevertheless, the increased savings this year are offsetting the impact of some of the top-line softness and as a result, we are maintaining our fiscal 2013 outlook for adjusted earnings per share at $6.75–7.00."
For its personal care division, Energizer recorded net sales of $652.6 million on a reported basis, including the unfavorable impact of currencies. Organic sales increased 1.3% due primarily to the that fact that wet shave net sales decreased 2% on a reported basis, and declined nearly 1% organically, due to prior year pipeline fill of Hydro Silk and the overall impact of competitive activity. These shortfalls were mostly offset by the launch of Hydro disposables in North America and international growth in men's systems and disposables. Also, skin care net sales increased 8% on both a reported and organic basis due to higher sales of Hawaiian Tropic, Banana Boat and Wet Ones, and all other product lines were essentially flat on a combined basis.
For the six months, net sales were down slightly due to the unfavorable impact of currencies. Exclusive of the impact of currencies, net sales were flat for the six month period primarily for the reasons noted above.