Spectrum Global Batteries & Appliances Net Rises in Q1
MADISON, Wis.-The Global Batteries & Appliances segment of Spectrum Brands boosted its net income by 2.3 percent in the company's fiscal first quarter, totaling $92 million.
The segment includes the company's personal-care products under the Remington brand and small appliances under Russell Hobbs. The bottom line edged up in spite of a drop of 3.4 percent in net sales to $666 million. Personal-care sales were down 1.8 percent, while small appliances experienced a 9.5 percent decrease in the quarter, which ended on Dec. 30.
A Spectrum statement explained that the declines in sales in the personal-care sector owed to shelf-space cutbacks at major retailers and labor disruptions at U.S. ports of entry, which reduced shipments during the holiday season. With small appliances, sales fell largely because of the company's decision to eliminate low-margin promotions, a move that helped improve gross margin in this product category.
The corporation as a whole reported a $13.4 million net loss in the first quarter, against net income of $13.1 million in the first quarter of last year, despite a sales gain of 2.5 percent to $870.3 million. Although expenses were held largely in check and gross margin slipped just slightly, Spectrum's bottom line was hurt by significant gains in acquisition- and integration-related charges, restructuring and related charges, and interest expense.
Dave Lumley, Spectrum's CEO, said the company achieved record sales in the quarter in spite of the soft economy, sluggish retail activity and cautious consumer spending. "Again in fiscal 2013, we expect to largely offset significant commodity and Asian-sourced product cost increases through our continuous-improvement programs, cost synergy programs, retail distribution gains, the exit from unprofitable or low-margin product lines as we did in the first quarter, select pricing actions and retention of stringent cost-control programs," Lumley said.