Gillette Sales Decline for the Fourth Quarter and Full Year

In line with expectations, The Gillette Company, Boston, MA, reported sales for the fourth quarter declined 3% to $2.72 billion due to unmatched trade inventory shipments in the fourth quarter of 2000, coupled with the completion of Gillette’s initiative to remove excess trade inventories of blades in 2001. The adverse effect of foreign exchange also reduced sales for the quarter by 1%.

Sales for the year totaled $8.96 billion, a decrease of 3% from $9.22 billion in 2000. Excluding the adverse effect of exchange, sales would have been level with those of the prior year, the company said.

“Last year marked a solid start in our efforts to transform Gillette,” said James M. Kilts, chairman and chief executive officer. “We made good progress on several key initiatives that will help the company deliver consistent and sustainable growth in the future. We enter 2002 with our financial turnaround under way and our strategic direction well-defined.”

Executives said strong performance by both Mach3 and Venus shaving systems led to Gillette’s highest U.S. shaving market share in 40 years, but the efforts to reduce excess trade inventories resulted in decreased net sales and earnings for the quarter and the full year. Sales of electric shavers grew 8% during the quarter.

Market share also increased the oral care category, notably for manual and power toothbrushes for the quarter and the full year. Oral Care sales of $391 million for the quarter increased 6%, and profits of $77 million climbed 22%. Manual oral care sales were unchanged from a year ago. For the year, sales grew 6% to $1.27 billion and profits rose 6% to $240 million.

Excluding restructuring and impairment charges, operations were down 11% to $503 million for the quarter, reflecting both the lower sales and a planned shift in mix in razors and blades, as well as in batteries. Net income from continuing operations fell 3% to $335 million in 2001, compared with the $345 million the previous year’s quarter.

For the fourth quarter, personal care sales declined 6% to $234 and profits increased 84% to $20 million. The sales decline was attributed to softness in the company’s shave preparation and female deodorant businesses in the U.S. and U.K. For the year, sales of $877 million dropped 9%, and profits of $68 million fell 32%, reflecting the impact of unfavorable exchange and the sale of the White Rain hair care brand during 2000, executives said.