Spectrum Appliances Profit Rises in Q2; Company Net Loss Widens
MADISON, Wis.-Segment profit for Spectrum Brands' Global Batteries and Appliances unit, parent to its Remington personal-care and Russell Hobbs small-appliances businesses, rose 2.5 percent to $41.4 million in its fiscal second quarter.
Net sales for the unit dropped 2.4 percent to $468.6 million in the quarter, which ended on March 31. Global sales of personal-care products were down 1.2 percent, while global sales of small appliances declined 3 percent. Sales were off due in small appliances as Spectrum moved to eliminate low-margin promotions, while sales suffered in personal care due to a one-time cutback in shelf space at an unidentified major retailer.
For Spectrum as a whole, its acquisition of the HHI hardware and home-improvement business in December had a positive effect on its top line and a negative effect on the bottom line. Net sales for the corporation jumped 32.4 percent to $987.8 million due to the added revenues from the HHI unit. However, the costs associated with the purchase deepened Spectrum's second-quarter net loss from $28.7 million last year to $41.2 million this year.
The acquisition and Spectrum's Value Model of supplying high-value products at lower costs will continue to improve its results in the quarters to come, according to CEO Dave Lumley. "Value is winning in today's marketplace with today's smart shoppers," Lumley said. "Consumers are embracing our 'same performance for less price' value brand proposition and are increasingly open to trial and brand conversion."