Playtex Expects Slump in Fourth Quarter

Playtex Products, Inc. today revised its outlook for the fourth quarter and full year 2000 and for the year 2001. Net sales for the quarter are expected to be approximately 5% below year ago levels due to a slowing economic environment, the related trade management of inventory levels, and continued competitive activities impacting the company’s infant care business. The company is assuming that these factors may continue through the first half of 2001.

Earnings for the fourth quarter are expected to be in the $.02 to $.04 range and full year 2000 performance is expected to be within the $.57 to $.59 range. The year 2001 is currently expected to grow by mid-single digits in net sales over the revised 2000 estimate. The Company continues to plan to maintain gross margins and advertising and promotion as a percent of net sales in 2001 essentially in line with full year 2000.

“Despite solid retail takeaway in feminine care, a strong start to the 2001 sun care season sell-in and some recovery in selected infant care segments, our overall shipment results were below year ago,” said Michael R. Gallagher, Playtex’s chief executive officer. “It appears that trade inventory levels were reduced unexpectedly at year-end for a number of our categories. In addition, the resumption of growth across certain of our infant care businesses has not yet occurred. We anticipate that these factors will continue into the first quarter, with mid-single digit growth in the second quarter and strong single digit growth thereafter. The fundamentals of market share and consumption growth remain attractive for our company. Given the uncertain economic environment, we believe it is prudent to plan 2001 for modest growth over 2000.”