Dial CEO Resigns After Profit Warning

Dial Corp. said today that it will not meet analysts’ annual profit expectations and the soap maker also said its chief executive and chief financial officer resigned. Dial said “deteriorating operating performance” has negatively affected its business, but the Scottsdale, AZ-based company did not say by how much it would fall short of analysts’ earnings expectations. The profit warning was the third issued by Dial this year.

Dial also said Tuesday that Malcolm Jozoff, Dial’s chairman, president and chief executive since 1996, has resigned to “pursue personal interests.” Mr. Jozoff has also resigned from the board of directors, Dial said. Herbert Baum, president and chief operating officer of Hasbro and a member of Dial’s board since 1997, will be Dial’s new chairman, president and CEO, the company said.

“The board believes Dial’s business is fundamentally sound, but in light of deteriorating operating performance has concluded that new leadership is needed to take full advantage of our world-class brands and rebuild credibility with Dial’s owners,” Joe Ford, a member of Dial’s boardand CEO of Alltel, said in a statement.

Additionally, Dial said its board had accepted the resignation of chief financial officer Susan Riley. Dial said its controller, Jack Tierney, has been named acting chief financial officer.

John Hughes, an analyst with Dain Rauscher, said Dial is struggling for a number of reasons, including rising prices for the materials it uses to make its products and fierce competition in the consumer products market. Mr. Hughes noted that Dial’s rivals, Procter & Gamble and Unilever, are among the world’s largest corporations. Mr. Hughes also said Dial has made some missteps in the introduction of new products. He said, for example, the company launched a new formulation of soap before retailers had a chance to sell their inventories of the old formulation.