Household and personal care provider Energizer Holdings says a solid first quarterly performance for personal care has helped buoy an otherwise poor sales performance.
The company, which bought up Playtex Products last year, giving it a footprint in personal care, said net earnings for the quarter ending December 31, 2009 were up from $102.6m to $111.0m, beating expectations and pushing up share prices.
However, analysts did also point out that the figures are not an accurate comparison as the net profit for the previous year was impacted by tax expenses and alignment costs of over $20m.
Battery sales plummet
Overall sales were down by 12.2 percent on weak sales of the company’s flagship Energizer battery brand, which forms an integral part of the company’s household products division.
“The first quarter results are as expected given severe macro-economic challenges,” said Ward Klein chief executive officer.
“Our personal care division delivered solid performance despite sluggish consumer spending… but future performance is greatly dependent on the overall economic environment.”
Personal care hit by currency weakness
Net sales for the company’s personal care division were down $5.6m to $394.5m. However, discounting a negative impact of $15.3m for unfavorable currency translation, the net sales were up $9.7m, a rise of 2 percent.
The company said that the results were driven by increases in sales for its Wet Shave category, thanks to strong sales of its Quattro razors.
Even stronger were skin care sales, which were up 18 percent on the back of strong sales for its sun care products in international markets, which also offset lower sales of its Wet Ones wipes.
Concern over strength of dollar
Looking ahead to the remaining three quarters of the financial year, the company did state that it was concerned about the future impact of a strong dollar against weaker international currencies.
This leads the company to believe that the prevailing impact of currency translation will be unfavorable, having a negative effect of between $105m and $115m on the company’s operating profit for the remainder of fiscal 2009.
“In response to the current negative macro-economic environment, we maintain a sharp focus on prudent cost containment and margin maintenance and enhancement efforts,” said Klein.