Spectrum Sees Second Quarter Net Sales Slip For Appliances, Personal Care

Spectrum Brands reported fiscal second quarter net sales for its Global Batteries & Appliance segment, which includes its Remington personal care and Russell Hobbs small appliance businesses, of $468.6 million, a decline of 2.4% from $480.1 million for the 2012 period. The company attributed the net sales decline to decreased revenues in the small appliance category from the planned and continued elimination of low-margin promotions in North America totaling nearly $10 million.

The company also noted that fiscal 2013 second quarter segment sales were negatively impacted by $2.7 million of foreign exchange. Excluding the foreign exchange impact, net sales for the segment declined 1.8% quarter-over-quarter.

The company reported net sales for the global personal care product category of $114.2 million for the quarter declined slightly versus $115.6 million in the comparable period last year. Increased revenues in Europe and Latin America nearly offset lower net sales in North America primarily due to a one-time shaving and grooming category shelf space cutback at a major retailer, partially offset by increased personal care revenues.

The small appliances product category reported second quarter net sales of $154.6 million, a decrease of 3% compared to $159.4 million in the second quarter of fiscal 2012. Higher net sales in Europe, driven by growth in the United Kingdom and regional expansion in Western and Eastern Europe, were more than offset by lower revenues in North America, which were attributable to the planned and continued elimination of low margin promotions totaling nearly $10 million. The elimination of low margin promotions contributed significantly to a more than 450 basis point improvement in North American small appliance gross margins quarter-over-quarter, which followed a nearly 330 basis point improvement in gross margin from this strategic initiative in the first quarter of fiscal 2013. Excluding the negative foreign exchange impact of $0.7 million, net sales for the small appliances product category decreased 2.6%.

Company wide Spectrum reported second quarter net sales of $987.8 million, including the HHI acquisition, increased 32.4%, versus $746.3 million a year ago. Including HHI in last year’s fiscal second quarter on a pro forma basis, net sales increased 1%. HHI delivered improved quarter-over-quarter results in first full quarter since its acquisition on December 17, 2012.

The company reported a net loss of $41.2 million and diluted loss per share of 79 cents in second quarter of fiscal 2013 versus net loss of $28.7 million and diluted loss per share of 56 cents in the second quarter of fiscal 2012 driven by $25.8 million of additional costs from sales of revalued inventory related to the HHI acquisition and one-time acquisition and integration and restructuring costs of $19.9 million, of which $12.8 million was attributable to the HHI acquisition.


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