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Duracell Q2 Battery Profit Up 12%

7/23/2002 09:17:00 AM Eastern

Boston - Duracell battery sales slipped 2 percent in the second quarter, dropping to $428 million, however, the company's profit climbed 12 percent, to $46 million, according to the company.

Increased promotional spending for Duracell batteries, whose parent is Gillette, especially in the highly competitive North American market - together with shifts in brand mix, pack sizes and retail channels - resulted in lower sales. These trends restrained profit growth, tempering the benefits of higher volume and cost-saving initiatives during the second quarter, said Gillette.

'While the high level of promotional spending in the battery category remains troubling, we are making progress toward our goal of improving our margins,' said James M. Kilts, chairman/CEO. 'We also are doing the right things to focus more on consumer benefits and less on promotional activities.'

Duracell's worldwide unit volume continued to grow in the second quarter, increasing 4 percent.

Overall Gillette sales in the second quarter, ended June 30, climbed 5 percent, to $2 billion, up from $1.9 billion in the year-ago period. Net income rose 27 percent, to $293 million, up from $232 million year over year. Excluding a one-time gain, net income increased to $272 million.

For the six months, sales rose 6 percent, to $3.8 billion, from $3.5 billion in the same period in 2001. Net income climbed to $516 million, up from $414 million in the same six months last year.