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Financial News



Published September 4, 2008
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Unilever To Sell North American Laundry Unit


Unilever has signed a definitive agreement to sell its North American laundry business in U.S., Canada and Puerto Rico to Vestar Capital Partners. The global private equity firm will merge the business with its existing operation, Huish Detergents Inc., to form a new company, The Sun Products Corporation (Sun Products).
   
The Unilever deal consists of a cash payment of $1.1 billion, together with preferred shares in The Sun Products Corporation with a face value of $375 million, and warrants offering the opportunity to acquire up to 2.5% of the common equity of The Sun Products Corporation.
   
The businesses to be sold include All, Snuggle, Wisk, Surf and Sunlight fabric cleaning and fabric conditioning brands in the U.S., Canada and Puerto Rico, as well as Unilever’s manufacturing facility in Baltimore, MD. The transaction is expected to close later this year.
    
“We have reached a good deal for both Unilever shareholders and the business. It puts our North American laundry people and brands into a company which is focused on the laundry category and which, with its new combined portfolio, is well-positioned to become a strong player in their market,” said Patrick Cescau, Unilever’s group chief executive. “Laundry remains an important category for Unilever outside North America. This transaction will allow us to focus our resources on our leading positions in Europe, Asia, Africa and Latin America.”
 

Sales Jump 16.5% at Colgate


Colgate-Palmolive Company posted a gain in worldwide sales with higher than expected earnings growth for second quarter 2008. Global sales rose 16.5% to $3.96 billion. Gross profit margin was almost stable at 56.5%, up from 56.0% a year prior. Operating profit as reported increased 17% to $767 million. Reported net income rose 19% to $493.8 million.
   
For the six months that ended June 30, 2008, net sales rose 17% to $7.7 billion, while gross profit dropped 2% to $4.3 billion, while operating profit slipped 1% to $1.5 billion. Net income fell 5% to $930.3 million.

Revlon Sees 8% Rise in 2Q Sales


Revlon, Inc. announced results for the second quarter ended June 30, 2008. Net sales rose 8% to $376.4 million.  In the U.S., net sales in the second quarter of 2008 increased 6% to $216.4 million.
   
According to the company, the primary driver of the second quarter net sales growth was higher shipments of Revlon color cosmetics, largely due to new product launches, including initial shipments of its more extensive second half 2008 new product lineup.
   
In the company’s international operations, net sales in the second quarter of 2008 increased 10.3% to $160 million. Each of the company’s international regions—Asia Pacific, Europe and Latin America—experienced net sales growth.
   
Operating income was $59.4 million, versus $16.9 million in the second quarter of 2007. Net income was $19.9 million, compared with a net loss of $11.3 million.
   
For the six months ended June 30, 2008, net sales increased 2.8% to $696.8 million. In the U.S., net sales decreased 1% to $393.6 million; in the company’s international operations, net sales increased 8.2% to $303.2 million. Operating income was $91.9 million in the first six months of 2008, versus $19.9 million in the first six months of 2007.

Second Quarter Looking Good at Avon


Avon Products, Inc. reported that second-quarter total revenue grew 17% to $2.7 billion. Sales of beauty products rose 19%. Active representatives increased 7%, and units sold were up 5% versus the prior-year quarter. According to the company, all six operating regions contributed to the growth in each of these measures.
   
Operating profit doubled to $374 million, while net income leaped 60% to $236 million. The company’s 19% growth in beauty sales included increases in all categories: color was up 26%, fragrance grew 17%, skin care increased 15% and personal care rose 17%.
   
Beauty sales benefited in part from a 10% increase in advertising expenditures to $103 million, according to the company. Advertising supported the launch of new products as well as representative recruitment in priority markets. For the six months ended June 30, 2008, net sales rose 16% to $5.2 million, while net income jumped 60% to $420.3 million.

Net Income Up 22% At Bare Escentuals


Bare Escentuals, Inc. posted financial results for the second quarter and six months ended June 29, 2008. Net sales for the second quarter were $138.5 million—an increase of approximately 12% from the same period last year. Net income increased 22% to $24.7 million.
   
For the six months ended June 29, 2008, net sales increased 16% to $278.9 million. Net income was $50.5 million, an increase of 24% compared to the same period last year.

Inter Parfums Reports 20% Increase in 2Q Sales


Inter Parfums, Inc. announced that net sales for the second quarter of 2008 were approximately $99.1 million, 20% ahead of 2007. The company is also reporting that for the first half of 2008, net sales were $222.2 million, up 32% from $167.9 million last year. Management affirmed its current 2008 guidance calling for net sales of approximately $460 million and net income of approximately $26.8 million.

Coty Aiming to Boost Its Cosmetics Portfolio


Coty is seeking acquisitions to expand its cosmetics business. The company, which markets Lancaster and Rimmel, is looking to increase annual sales to $5 billion by 2010 from $3.3 billion in 2007, according to reports. Some 82% of Coty’s sales last year were generated in the perfume division, while makeup accounted for 15% and skin care generated  3% of revenue. Coty is said to be one of several parties interested in buying Clarins.

P&G’s Sales Jump 9% in Fiscal 2008


The Procter & Gamble Company posted a net sales growth of 10% for the April-June quarter to $21.3 billion, and 9% net sales growth for the fiscal year to $83.5 billion. Growth from new innovations on key brands was driven by the Head & Shoulders brand restage, Gucci by Gucci, Cover Girl Lash Blast, Nice ‘N Easy Perfect 10 and Febreze Candles, according to the company.
   
Operating profit increased 13% for the quarter and 11% for the fiscal year behind sales growth and operating margin improvement. Net earnings were up 33% for the quarter to $3 billion and 17% for 2008 to $12.1 billion.
   
Beauty net sales increased 11% during the quarter to $5 billion. According to P&G, cosmetics volume grew by high-single digits behind the Cover Girl Lash Blast mascara initiative. Skin care volume grew mid-single digits behind strong growth in developing regions. Hair care volume grew low-single digits as strong growth from Head & Shoulders and Nice ‘N Easy were partially offset by declines in professional hair care. Net earnings for beauty were flat during the quarter at $569 million.
   
Fabric care and home care net sales increased 13% during the quarter to $6.1 billion. Fabric care volume was up by mid-single digits from Tide, Ariel, Gain and Downy. Home care volume grew by high-single digits as a result of continued success of Febreze initiatives and trade inventory increases prior to announced price increases.


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