Energizer Holdings Inc. (
reported fourth-quarter fiscal 2013 non-GAAP earnings of $1.38
per share, which comfortably beat the Zacks Consensus Estimate of
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Revenues declined 6.7% from the year-ago quarter to $1.11 billion
but beat the Zacks Consensus Estimate of $1.08 billion. The
year-over-year decline in revenues was primarily due to customer
losses in the Household Products segment and unfavorable foreign
Revenues from the Personal Care segment decreased 0.4% from the
year-ago quarter to $592.5 million primarily due to the effect of
Household Products revenues declined 14.4% from the year-ago
quarter to $473.6 million. Organic sales increased nearly 3%
within Personal Care. The company realized approximately $47
million of gross savings as a result of its 2013 restructuring
Gross margin for the quarter was up 190 basis points (bps) to
47.0% from 46.1% reported in the year-ago quarter. Gross margin
improved as the decline in cost of goods sold was greater than
the decline in revenues.
Operating margin increased 150 bps from the year-ago quarter to
15.0% primarily due to lower-than-expected costs. Year over year,
selling, general & administrative expense declined 1.1%,
while research & development expense declined 16.7%,
primarily due to cost controls and restructuring initiatives.
Advertising and sales promotion expense increased 22.1% due to a
change in the spending schedule. The company reported
third-quarter restructuring savings of $30.2 million.
Energizer reported non-GAAP net earnings of $87.0 million or
$1.38 per share which declined from $112.0 million or $1.76 per
share reported in the year-ago quarter. The company also
increased its dividend by 25% to 50 cents.
Energizer expects fiscal 2014 adjusted earnings to be in the
range of $7.25 to $7.50 per share. The company expects net sales
of $4,466.0 million. Moreover, the company expects gross margin
expansion of 30 bps while SG&A as a percentage of revenues is
expected to improve 110 bps.
ENR reported a decent fourth-quarter fiscal 2013 result, with
earnings per share and revenues beating the Zacks Consensus
Estimate. We believe that product innovations coupled with higher
pricing of Energizer's household products and the restructuring
initiatives would positively impact its results, going forward.
Moreover, lower-than-expected operating expenses and prudent
product mix would expand margins in the near term. Also, the
company's partnership with
AXE brand is expected to result in market share gains, going
forward. This apart, the acquisition strategy of the company is
expected to reap benefits.
However, the expected declines in volumes in Household Product
segment, unfavorable foreign exchange and increasing competition
from companies such as
Kimberley-Clark Corp. (
Procter & Gamble Co. (
are the near-term headwinds.
Currently, Energizer carries a Zacks Rank #3 (Hold).