St. Louis – The 7 percent increase in Energizer Holding’s North American sales enjoyed during the company’s fiscal second quarter was driven by a 58 percent increase in sales of large cell-size alkaline batteries purchased by consumers concerned about potential terrorism and security problems.
Energizer North American sales for the three months, ended March 31, hit $197.2 million, up from $184.2 million in the year-ago period. Segment operating profit climbed to $47 million in the second quarter, up from $43.2 million the previous year. The prior-year second quarter included a $10 million write-off of Kmart’s accounts receivable, in response to its bankruptcy filing.
In the United States, Energizer’s retail alkaline category units grew an estimated 12 percent in the second quarter, while category value increased 3 percent, reflecting continued promotions and lower everyday pricing by retailers. Retail consumption of Energizer alkaline batteries increased an estimated 5 percent in units and 1 percent in value in the second quarter.
Energizer said it continues to maintain pricing and promotional efforts designed to increase both sales and profitability, namely reductions in everyday battery prices, as well as a lowered depth and frequency of promotional discounting.
For the six months, the company’s North American battery segment increased sales by 2 percent, reaching $548.6 million, compared with the year-ago $536.1 million. Operating profit edged downward, to $159.9 million, compared with $160.9 million in the same period a year ago. The sales increase was due to improved non-alkaline product volume, partially offset by unfavorable pricing and product mix. Absent a $10 million write-off, segment profit dropped by $11 million.
In the second quarter, overall alkaline battery sales reached $232.6 million, up from $211.6 million year-on-year. For the six months, alkaline battery sales climbed to $643 million, compared with $632.2 million in the same period the prior year. Much of the quarterly increase and six-month increase came at the expense of lower sales of carbon zinc batteries.
Consolidated Energizer revenue for the second quarter increased 7 percent, hitting $362.6 million, up from $339.7 million in the year-ago three months. Net earnings came in at $33 million for the second quarter, compared with $20 million year over year. Included in the second quarter report for last year is a $2.9 million restructuring provision and a bad debt reserve of $6.1 million.
For the six months, Energizer consolidated sales rose 3 percent, reaching $935 million, compared with $907.4 million in the year-earlier six months. Net earnings were $119.4 million for the six months, up from $90.4 million in the same period the previous year. Last year’s six months include a $5.8 million restructuring provision and bad debt reserve of $6.1 million.