Q4 Personal Care Sales Slip at Energizer

Bolstered by better sales of Hawaiian Tropic and fewer seasonal returns, Energizer today announced that fourth quarter skin care sales rose 2%. However, net sales for the quarter fell 2% to $493.4 million. The company blamed the decline on the unfavorable impact of currencies of approximately $2 million and a decrease in sales in Venezuela of approximately $6 million as a result of currency devaluation and unfavorable economic conditions.

Excluding currencies and Venezuela, Wet Shave sales were flat as higher volumes from the launch of Schick Hydro were offset by declines in legacy shaving products and lower sales of Edge and Skintimate as the prior year fourth quarter included approximately $13 million for June sales due to the timing of the acquisition. Skin care sales increased 9% due to lower projected returns of sun care products as the prior year included higher return projections in anticipation of the Hawaiian Tropic brand restage in fiscal 2010. This was partially offset by lower shipments of Wet Ones, as fiscal fourth quarter shipments in 2010 were more in line with normalized demand post H1N1 consumption peaks. Infant Care sales were flat for the quarter. Feminine Care sales decreased 9% on lower sales of Gentle Glide due to competitive activity in the quarter partially offset by continued growth of Sport tampons.

Segment profit for the quarter was $35.5 million, down $25.5 million or 42% versus the same quarter last year due primarily to higher A&P spending behind the SchickHydro launch.

Net sales for the year ended September 30, 2010 increased $158.3 million, or 8% to more than $4.2 billion, including approximately $44 million of favorable currencies, partially offset by reduced net sales in Venezuela of $10 million due to the reasons noted above. Excluding the impact of currencies and Venezuela, sales increased approximately $124 million driven by higher year over year sales in Wet Shave. Net income on the year jumped 35% to $403 million.

Wet Shave net sales increased $126 million, or 11%, due to the full year impact of the Edge and Skintimate brand acquisition, which added approximately $90 million to net sales, and the launch of Schick Hydro. Infant Care sales increased 2% driven by Diaper Genie and cups, offset by lower sales of bottles. Skin Care sales increased 3% on higher shipments of Hawaiian Tropic, and lower end of season suncare returns partially offset by lower shipments of Wet Ones. Feminine Care sales decreased 8% on lower shipments of Gentle Glide due to significant competitive activity partially offset by continued growth of Sport tampons.

Segment profit for the fiscal year was $366.6 million, an increase of $25.5 million or 7% due to the favorable impact of currencies of approximately $25 million, exclusive of Venezuela. Excluding the impact of favorable currencies, segment profit was essentially flat as higher gross margin from the increased sales noted above was offset by A&P and overhead spending, in part, due to the support of the Schick Hydro launch and the full year impact of spending behind Edge and Skintimate. Overall, the Venezuela devaluation and related deterioration in economic conditions in the country did not have a material impact on year over year segment profit.