Sales Up, But Profit Down at Energizer

Energizer posted mixed results for its annual report for the year ended Sept. 30, 20111. According to the company, sales rose 9% to $4.2 billion, but profit dropped 35% to $261.2 million.

“This past fiscal year, Energizer focused on investing in a number of strategic initiatives to enhance shareholder value,” said Ward Klein, chief executive officer.”We remain committed to innovation, brand and category development and capitalizing on other growth opportunities.We have rolled out exciting new products and announcements including the global launch of Schick Hydro and the acquisition of American Safety Razor, which resulted in strong growth in our Personal Care division.Through these investments, we gained razor and blade share in the men’s systems segment in key markets where Hydro was launched, and we are encouraged by significant trial and consumer satisfaction.

“Our Skin Care business also continues to grow, as we further develop our sun care business both domestically and in international markets.Within Household Products, the restructuring of our production footprint is substantially complete, improving our cost structure.We believe that investing in these innovation initiatives, as well as right-sizing our battery production footprint, have positioned us for a return to meaningful earnings growth in Fiscal 2012.”

Net sales for the 2011 fiscal year increased approximately 20% in Personal Care, of which 4.5% was organic sales growth and the remainder was driven by American Safety Razor (ASR) and favorable currencies. Net sales in Wet Shave increased 29% including the impact of ASR and favorable currencies, offset by a net sales decline in Venezuela.

Skin Care net sales increased 9% due to the favorable impact of lower prior year sun care returns and higher shipments for the current sun care season. In household products, net sales increased 4.8%.

In Personal Care, including a full year of ASR results, the company expects segment profit growth in fiscal 2012 will be primarily driven by mid-single digit organic sales growth.The company plans to continue to invest in trial generating activities, brand equity and growth opportunities across all of its Personal Care categories to grow its sales and continue to enhance the long term health of the business.

Segment profit in Household Products is expected to stabilize in fiscal 2012 as the favorable impacts of new pricing and incremental restructuring savings are expected to offset anticipated continued battery category challenges, higher costs for commodities and other inflationary increases.As previously noted, Energizer believes the global category value continues to decline overall and this trend remains a concern for fiscal 2012.