Gillette’s Results are on Target

The Gillette Company today said that results for the third quarter, ended September 30, were in line with expectations. Sales increased as market shares improved in each of Gillette’s core categories, including batteries. Very strong performances by the Mach3 and Venus shaving systems were offset by the company’s ongoing initiative to remove excess trade inventories of blades and batteries. Unfavorable foreign exchange, increased marketing investment and higher year-on-year administrative costs also affected the quarter’s performance.

Sales for the quarter rose 2% to $2.36 billion. Unfavorable foreign exchange, most notably in Latin America and the Asia Pacific region, reduced net sales by 3%. The trade inventory reduction initiative also lowered net sales by approximately 1%. Profit from operations for the quarter declined 18% to $473 million. Profit was negatively impacted by increased investment in marketing and merchandising, a write-down of slow-moving and obsolete inventories, and unfavorable mix. Income from continuing operations fell 16% to $296 million.

For the nine months ended September 30, 2001, sales fell 3% to $6.24 billion, compared with $6.42 billion in 2000. Excluding the adverse effects of exchange, sales grew 1% from those of the prior year.

Profit from operations for the first nine months fell 23% to $1.17 billion, compared with $1.52 billion the year before. Income from continuing operations of $710 million was 22% below that of the prior year. Diluted net income from continuing operations of 67 cents per common share dropped 21%, compared with 85 cents a year ago. Exchange negatively affected per share results by three cents.