Energizer reported a drop in its third quarter sales on the back of lower personal care revenues, while net profit figures were also below expectations.
Group sales, which include its household goods portfolio and famous battery brand, were down 8.9 percent to $1.23bn on a reported basis, which included a hit of $28.7m, or 2.3 percent due to unfavorable currency exchange rates from revenues earned in Europe and Latin America.
Net earnings for the group were $70.2m, compared to $65.9m in the corresponding quarter for 2011. Although the company has continued to improve its profit margin on the back of restructuring, the increase was still below market analysts’ expectations.
While CEO Ward Klein noted that the group sales has been hit by weakening global currencies, he also highlighted the fact that the personal care division has been particularly impacted by heightened competitive activity as the quarter progressed.
Most sales of personal care products lines 'down'
“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,” he said.
On a like-for-like basis, personal care sales dropped by 7.1 percent to $673.5m, a performance that reflected both the tough market conditions and the impact from currency translations.
In organic terms the personal care revenues represented a fall of 5.1 percent, which takes into consideration a 2.0 percent hit from overseas revenues against an increasingly strong US dollar.
Nine month revenues up, reflecting stronger first half
For the first nine months of the year, personal care revenues were up 2.4 percent on a like-for-like basis to $1.89bn, a figure that reflected a more effective product mix and better currency translations for the first six months of the year.
The company noted that Wet Shave sales decreased 8 percent, with a further 5 percent impact from currency exchange rates, whereas net sales for skin care fell by 6 percent and net sales of infant care product fell by 12 percent.
Looking to the fourth and final quarter, the company said that it expected earnings to be positively impacted by a reduction on spending for advertising and marketing, but also underlined the fact that sales were likely to be further impacted by lower sales, particularly for household products, together with negative currency translations.