Benefiting from smooth shaves and stormy weather, Energizer (NYSE:ENR) reported a fourth-quarter boost in sales Tuesday, helped along by demand for its Quattro razors and batteries.
Despite the jump in sales, the company earned just 38 cents a share, or $33 million, compared to 61 cents a share, or $56.2 million in the same quarter last year. The dip in profits was attributed to early retirement of debt and a writedown of inventory from its purchase of Schick-Wilkinson Sword.
Still, by all indications, razors and batteries flew off the shelves. Energizer's sales bolted 59% higher to $703.5 million, with a good portion of that due to the pair of hot items.
The battery bonanza, of course, comes as no surprise. Those of us who live in certain parts of the Atlantic Coast know there were no batteries to be found just prior to Hurricane Isabel. Blackouts in the Northeast only fueled battery demand further.
Despite what seems like good news in these solid household categories -- both being products that people use, dispose of, then buy again -- these same trends and events fueled sales growth for rival Gillette (NYSE:G), which makes Mach3 razors and Duracell batteries. (And that rivalry is a heated one, considering the ludicrous lawsuits in the razor blade biz as reported by Fool Rex Moore.)
The prospect of a rough winter might prompt more runs on batteries, especially by those who stumbled around by candlelight during Isabel. On the other hand, it might take a blizzard to prompt preparations akin to a hurricane, and a cold winter might stunt the growth of razors should men decide to go all Grizzly Adams as defense against arctic winds.
Seriously, with tough sales comparisons driven by demand that could prove fleeting, it will be interesting to see just how energized the next few quarters will be.
Was Isabel a one-time deal, or will consumers see her as a lesson in battery preparedness for the winter ahead? Will men decide shaving's stupid, regardless of how many blades, ditch the razors and bring beards back into style? Discuss with other Fools on the Gillette discussion board.
Alyce Lomax welcomes your feedback at [email protected].
