Duracell Q4 Biz Sales At Gillette Rise 5%
By Jeff Malester -- TWICE, 2/9/2004
BOSTON — Multi-product provider Gillette reported a 5 percent increase in fourth quarter sales for its Duracell-brand battery business, coming in at $685 million, while profit in the battery segment climbed 35 percent, to $149 million.
Margin for Duracell products "improved considerably," said Gillette, reflecting substantial cost savings.
Duracell sales growth in the fourth quarter, ended Dec. 31, resulted from a favorable foreign exchange of 5 percent, the positive effect of lower trade and consumer spending, and, to a lesser extent, the addition of a new battery business in China. These gains, said Gillette, were partially offset by the impact of lower prices from Duracell's price-deal realignment initiative.
Riding high on strong yearly sales growth and "exceptional" profit gains for Duracell batteries, Gillette recorded a 6 percent increase in yearly battery sales, coming in at over $2 billion. Volume increases can be primarily attributed to spikes in consumer demand in the both the first and third quarters due to U.S. homeland security concerns and electrical blackouts, said the company.
Profit in Gillette's Duracell battery segment jumped 49 percent for the 12 months, to $348 million, reflecting sales gains, manufacturing efficiencies and overhead cost savings.
Consolidated Gillette sales — due to gains in its Duracell business and the weak dollar, which offset lower profit gains for razors and blades — increased 4 percent in the fourth quarter, hitting $2.6 billion, from $2.5 billion, while net income rose to $368 million, from $356 million.
For the 12 months, Gillette consolidated sales jumped 9 percent, reaching $9.3 billion, compared with $8.5 billion year-on-year. Net income was $1.4 billion for the year, up 14 percent from the $1.2 billion reported the previous year.
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