Gillette’s Duracell Battery Sales Increase 12%

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Boston — Net sales of Duracell batteries jumped 12 percent in the first quarter at parent Gillette, hitting $462 million for the period ended March 31.

The increase resulted from “accelerating consumption of alkaline batteries in key markets around the world,” said the company.

Duracell’s value share in the United States remained stable, said Gillette, due, in part, to its stepped-up advertising and improved marketing programs, and despite continued promotional activity by low-price and private-label brands, compared with the same quarter in 2004.

U.S. battery growth increased 4 percent during the first quarter, compared with the prior year, said Gillette, benefiting from a strong post-holiday shopping season. Category growth also was strong outside the United States.

Profit from operations for the Duracell segment hit $91 million in the first three months, an increase of 23 percent over the prior-year period. This gain reflected higher volume, improved product mix, manufacturing efficiencies and overhead reductions. Restraining profit growth were costs related to a planned facility closure.

Gillette said that due to ongoing increases in raw materials costs, the company will increase Duracell alkaline battery prices by 6 percent to 7 percent in North America, effective August 15.

Consolidated Gillette sales climbed 17 percent, reaching $2.6 billion, up from $2.2 billion year-on-year.

Profit from operations increased 15 percent, to $640 million in the first three months, up from $556 million in the same quarter last year. The rise reflected strong demand for premium products across all major lines, and sustained manufacturing productivity and overhead reductions. Profit growth was tempered somewhat by costs related to the planned closure of a U.S. battery factory.

Consolidated net income in the first quarter jumped 19 percent, hitting $449 million, compared with a year-ago $376 million. This increase was driven by the strong operating results and a lower effective tax rate.


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