Energizer Holdings Inc.
) reported first-quarter fiscal 2014 non-GAAP earnings of $2.10
per share, which lagged the Zacks Consensus Estimate of $2.16 per
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Revenues declined 6.6% from the year-ago quarter to $1.11 billion
and it missed the Zacks Consensus Estimate of $1.16 billion too.
The year-over-year decline in revenues was primarily due to
customer losses in the Household Products segment and
weaker-than-expected revenues in Personal Care.
Revenues from the Personal Care segment decreased 0.7% from the
year-ago quarter to $550.2 million primarily due to the effect of
Household Products revenues declined 11.7% from the year-ago
quarter to $563.7 million. The company realized approximately
$140 million of gross savings as a result of its restructuring
Gross margin for the quarter was down 120 basis points (bps) to
45.9% from 47.1% reported in the year-ago quarter. Gross margin
declined as the decline in revenues was greater than the decline
in the cost of goods sold (COGS).
Year-over-year, selling, general & administrative expense
increased 1.5%, while research & development expense declined
11.0%, primarily due to cost controls and restructuring
Advertising and sales promotion expense decreased 14.6% on a
year-over-year basis. The decreased spending was a result of the
timing of promotion and innovation launch activity as compared to
the prior year. Energizer remains committed to investing at its
full year planned levels.
Energizer reported non-GAAP earnings of $2.10 per share which
declined from $2.20 per share reported in the year-ago quarter.
The company also increased its dividend by 24% to 31 cents.
However, no shares were repurchased by the company during the
Energizer expects fiscal 2014 adjusted earnings to be in the
range of $7.00 to $7.25 per share while the Zacks Consensus
Estimate for EPS in fiscal 2014 is pegged at $7.18 per share.
Moreover, the company has raised its total project gross savings
estimate from $225 million to $300 million. The increased savings
are expected to be realized throughout fiscal 2015 and 2016, and
the total run rate impact is expected to be realized in fiscal
ENR reported a dismal first-quarter fiscal 2014 result, with
earnings per share and revenues missing the Zacks Consensus
Estimate. Energizer believes that its results were negatively
impacted by unfavorable global currencies, and pricing controls
and import restrictions in certain Latin American countries.
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
Procter & Gamble Co.
) are the near-term headwinds.
Currently, Energizer carries a Zacks Rank #3 (Hold).