Energizer growth driven by personal care segment
ST. LOUIS Energizer Holdings’ stronger foothold in the personal care segment following last year’s acquisition of Playtex appears to be paying off as the personal care segment proved to be the growth driver during the third quarter.
For the quarter, total net sales increased $266.7 million, or 33 percent, to $1.07 billion due primarily to the acquisition of Playtex on Oct. 1, 2007, which added $246 million to net sales. Net sales in the legacy personal care business rose $31.4 million while net sales in the household products business dropped $10.7 million.
Net earnings for the quarter were $66.7 million, or $1.13 per diluted share, versus net earnings of $62.5 million, or $1.06 per diluted share, in the year-ago period. The current quarter includes an after-tax expense of $1.9 million, or 3 cents per diluted share, related to Playtex integration costs and a $4 million expense for income taxes, or 7 cents per diluted share, to adjust prior year tax accruals.
“General economic conditions continue to impact our battery business, and it remains to be seen if category softness will impact the upcoming holiday season,” stated Ward Klein, chief executive officer. “Within personal care, wet shave showed good growth behind the Quattro family of products, which was due in part to new product introductions earlier this year. In addition, we are pleased with Playtex’s solid business performance given our significant integration efforts, which remain on schedule. Finally, we were able to make good progress on reducing our leverage ratio and expect to be under 3.5 by the end of calendar 2008, if not sooner.”
On a constant currency basis, sales rose 4 percent in the personal care segment driven by higher wet shave and sun care sales, partially due to the inclusion of Hawaiian Tropic for the full quarter. Wet shave sales rose 4 percent due to $19.1 million in higher sales volumes spread across all geographic regions driven by the Quattro brand. Skin care net sales rose 11 percent due to higher sun care sales due partially to the inclusion of Hawaiian Tropic for the full quarter. Excluding Hawaiian Tropic, skin care net sales rose 7 percent. Feminine care net sales slipped 4 percent due primarily to the discontinuation of Beyond along with declines in plastic applicator tampons as the prior year quarter included the launch volume of the large count Sport product.
Segment profit rose $15.2 million to $83.2 million for the quarter. On a constant currency basis, segment profit rose $9 million.