2010 Sales Rise 2.7% At Church & Dwight
• Full year 2010 sales increased 2.7% to $2.6 billion at Church & Dwight Co., Inc.
James R. Craigie chairman and chief executive officer, commented, “We are very proud of the business results that we accomplished in 2010. Despite weak consumer demand and intense price competition, we delivered 3% organic sales growth, operating margin exceeding 18.1%, strong EPS growth and record free cash flow. Most importantly, we were able to increase market share in six of our eight power brands in 2010 and ended the year with strong consumption in our major brands.
“This consumption performance reflects a steady increase in marketing spending throughout the year, ending with our highest marketing spending of the year in the fourth quarter. Our new product launches, such as Arm & Hammer Power Gel Laundry Detergent and Arm & Hammer Double Duty Cat Litter, have also been key contributors to our organic growth this year. In addition, our new manufacturing plant and distribution center in York County, PA, supported continued strong revenue growth and production efficiency for our laundry deter- gent business.”
Reported net sales for the fourth quarter decreased 2.1% to $656.9 million.
In regard to 2011, Craigie said, “We expect to build on our strong performance exiting 2010 and generate organic growth of 3-4% in 2011.”
Sales and EarningsDisappoint at Avon
• Avon Products Inc.’s fourth-quarter earnings fell 15% because of service disruptions in Brazil and weakness in Russia. For the quarter, the company said it earned $229.5 million, compared to $269.4 million in the year-ago period. Sales rose just 1% to $3.14 billion.
“As we closed out the year, we continued to experience disappointing sales results which were negatively impacted by service disruptions in Brazil and weak performance in Russia,” CEO Andrea Jung said.
It was the second consecutive quarter of disappointing results from Brazil, usually a stronghold for Avon. Last quarter, the company said relaunches of makeup such as mascara and lipstick went poorly.
Revenue from North America, 20% of Avon’s total, rose 1% to $644.4 million, although its acquisition of Silpada, a direct jewelry seller, helped sales by 11%. Unit sales dropped 14%.
Revenue from Latin America, Avon’s largest region accounting for 40% of its business, rose 5% to $1.27 billion.
The steepest drop came from China, where revenue fell 45% to $55 million as the company continues to transition to a direct-selling system more similar to the one it uses elsewhere. A 44% drop in unit sales hurt revenue as the company advertised less.
Elsewhere, revenue rose 9% in Western Europe, the Middle East and Africa to $477.6 million and rose 8% in Asia Pacific to $215.2 million. Revenue slipped 6% in Central and Eastern Europe.
For the year, net income fell 3% to $606.3 million. Revenue rose 6% to $10.86 billion.
Avon cut prices during the recession but is raising them again. It has been focusing on acquisitions for growth and bought skin care products company Liz Earle in 2010.
Strong Q2 at Estée LauderSales Increase 10%
• The Estée Lauder Company’s fiscal second quarter earnings rose 34%, with the beauty products company benefitting from strong holiday sales and a weaker U.S. dollar. Revenue also beat analysts’ expectations. Net sales increased 10% to $2.49 billion. Net earnings for the quarter jumped 34% to $343.9 million, the company said.
For the six months ended Dec. 31, 2010, the company reported net sales of $4.58 billion—a 12% increase.
President and chief executive Fabrizio Freda said sales growth was led by the company’s international businesses, particularly in travel retail and emerging markets, and all its businesses benefited from its cost-cutting efforts.
Skin care net sales grew in each of the company’s regions. Operating income increased sharply, primarily reflecting improved results from certain of the company’s heritage brands, driven by increased net sales from higher-margin product launches.
Makeup net sales grew in each geographic region. The majority of the sales increase came from the company’s makeup artist brands, which included incremental sales from the acquisition of the Smashbox brand on July 1, 2010. Operating income increased, primarily reflecting improved results from certain of the company’s heritage brands and from its makeup artist brands.
The fragrance category posted solid double-digit net sales growth compared with the prior-year quarter. Sales gains were strongest in the Americas.
Hair care net sales increased primarily because of incremental sales from expanded distribution, particularly outside the U.S.
A Stellar 2010 for LVMHAs Sales Jump 19%
• This global economic recovery has been very good for luxury products purveyor LVMH Moët Hennessy Louis Vuitton, as sales rose 19% for the year.
LVMH’s perfumes and cosmetics unit recorded revenue growth of 12% to approximately $4.2 billion. Profit from recurring operations rose 14%.
“Two thousand ten was a great vintage for LVMH,” said Bernard Arnault, chairman and CEO of LVMH. “The quality of our products, the originality of our brands and the talent of our teams, bolstered by the economic recovery, allowed us once again to gain market share throughout the world. In 2011, LVMH intends to further strengthen its global leadership position in high quality products by relying on its sound long term strategy.”
The company recently acquired the Ole Henriksen skin care brand and purchased a majority stake in Nude, another luxury skin care firm.
Alberto-Culver ReportsQ1 Sales Increase
• Alberto Culver said first quarter sales increased 11.7% to $405.3 million. On an organic basis, which excludes the effect of foreign currency fluctuations and acquisitions, sales increased 4.4%.
On Sept. 27, 2010, the company entered into a definitive agreement with Unilever in which Unilever will acquire all of the outstanding shares of Alberto Culver for $37.50 per share in cash. On Dec. 17, 2010, Alberto Culver stockholders approved the transaction.
In the U.S., Q1 sales increased 2.8%, primarily due to strength in hair care, particularly Nexxus. International sales on a reported basis increased 25.2% behind strong growth in all regions in both hair care and skin care.
Sales Up at Elizabeth Arden;Increase 3% in Q2
• Elizabeth Arden, Inc. posted favorable financial results for its second fiscal quarter ended Dec. 31, 2010. Net sales increased 3.1% to $405.6 million.
For the six months ended Dec. 31, 2010, the company reported net sales of $690.5 million, an increase of 4.9%.
E. Scott Beattie, chairman, president and chief executive officer of Elizabeth Arden, Inc., commented, “The momentum we saw in our business through the first quarter continues. Sales and earnings results were ahead of our prior guidance, driven primarily by the continued strong performance of our international business. In constant currencies, net sales of our international business increased by 12%, while net sales in North America were flat.
“We saw strong net sales increases in our mass retail and direct-to-consumer businesses that offset declines in our U.S. department store fragrance business, which were largely anticipated.”
Beattie continued, “We are pleased with the performance of our brands and the progress we are making with our key initiatives. Year to date, sales of Elizabeth Arden-branded products rose by 7% globally, while sales of our European fragrance business grew by 13%, consistent with our strategy to accelerate the growth of the Elizabeth Arden brand and increase our share of the European fragrance market.”
Colgate Posts 1.5%Rise in Sales for 2010
• For the full year 2010, worldwide sales at Colgate-Palmolive Company rose 1.5% to $15.6 billion. Global unit volume grew 3%. However, net income stayed almost flat at $2.2 billion.
The company reported worldwide sales fell 2.5% to$3.98 billion in the fourth quarter. Operating profit decreased 9% to $905 million, while net income slipped 1% to $624 million.
Ian Cook, chairman, president and chief executive officer, commented, “We are pleased to have achieved another year of double-digit earnings per share growth in 2010, despite aggressive competitive activity and difficult economic conditions around the world.
“Colgate’s global market shares in toothpaste and manual toothbrushes are both at record highs year to date. Colgate’s share of the global toothpaste market strengthened to 44.2% year to date, led by share gains in Brazil, China, India, Venezuela, France, Greece and the United Kingdom. Colgate also strengthened its global leadership in manual toothbrushes, with its global market share in that category reaching 31.6% year to date, up 1.6 share points versus year ago.
“Pleasingly, our leadership in emerging markets, which represent over half of our global sales, continued to strengthen during the quarter.
“As we enter 2011, we continue to plan for higher levels of advertising spending in support of a very full pipeline of new products, which should fuel topline growth worldwide.”