"We are pleased with second quarter earnings and the progress we have made on our cost reduction initiatives, which are tracking ahead of plan," said Ward Klein, chief executive officer. "We experienced flat organic sales in the quarter, as modest top line growth in Personal Care was offset by declines in Household Products. The growth in Personal Care was negatively impacted by extraordinary competitive promotional activity, which we believe contributed to overall category deflation. Despite these top line challenges, operating margin improvement delivered strong growth in earnings per share versus the prior year quarter.
"Given the significant progress on our 2013 restructuring project, we have revised our fiscal 2013 gross savings estimate to $50 to $60 million from our original estimate of $25 to $35 million. For the total project, gross savings have been increased to $225 million from the original estimate of $200 million. We plan to re-invest these incremental total project savings in support of our business, netting to the previously announced $150 million in net savings by 2015. Nevertheless, the increased savings this year are offsetting the impact of some of the top-line softness and as a result, we are maintaining our fiscal 2013 outlook for adjusted earnings per share at $6.75 to $7.00."
Net sales for the quarter stayed flat at 0.5% to $1.09 billion; same for the six months at $2.29 billion. For the second fiscal quarter, net sales were essentially flat as modest organic growth was offset by unfavorable currencies, primarily in Asia and Latin America. Organic net sales were stable for the quarter as low-single digit organic growth in personal care was partially offset by a slight reduction in organic sales in household products. On a year to date basis, net sales were down slightly due to unfavorable currencies. Both personal care and household products net sales were essentially flat on an organic basis for the first half of fiscal 2013.
In personal care, for the quarter, net sales increased 0.2% to $652.6 million; for the six months it remained flat at $1.206 billion.
Wet shave net sales decreased 2% on a reported basis, and declined nearly 1% organically, due to prior year pipeline fill of Hydro Silk and the overall impact of competitive activity. These shortfalls were mostly offset by the launch of Hydro disposables in North America and international growth in men's systems and disposables.
Skin care net sales increased 8% on both a reported and organic basis due to higher sales of Hawaiian Tropic, Banana Boat and Wet Ones.
All other product lines were essentially flat on a combined basis in personal care.