By David Gill
An early start to the holiday shopping season fueled Remington to a strong quarterly performance--and has provided momentum to the high-profile shaver brand as it prepares for a difficult consumer environment.
According to parent company Spectrum Brands' fourth-quarter numbers, Remington's global sales skyrocketed by 36 percent in the quarter. In North America alone, the brand posted a 30 percent pickup in sales. Kent Hussey, Spectrum Brands' chief executive officer, told a Webcast audience of financial analysts that early shipments of product for the holiday selling season provided much of the boost for Remington in the final quarter of the company's fiscal year.
"Our retail customers decided to get their holiday shipments early," Hussey said. "Normally, our holiday shipments begin in October, but this year, a significant amount of them took place in September."
The Remington product line is part of Spectrum's Global Batteries and Personal Care segment, whose profit jumped 72.5 percent versus the fourth quarter of 2006, to $54.5 million. Sales for the segment rose 16 percent to $400.4 million. Remington also benefited from increased distribution and market share in Europe, according to a statement from Spectrum Brands.
For fiscal-year 2007, the segment registered a profit of $143.9 million, up 22.6 percent of the prior fiscal year. Sales came in at greater than $1.4 billion, rising by 5.9 percent.
While basking in the glow of such healthy results, Hussey also expressed some concern about the outlook for Remington with the onset of the new fiscal year. "We feel a little cautious about consumer spending in this overall economic environment," he said to the analysts. "We'll be affected by the slowdown just like other consumer-product companies. The feedback we get from our [retail] customers shows that they expect slowdowns in some product categories. We'll know better what to expect for next year after the holiday season."
Hussey also said the focus for Remington has zeroed in on segment profitability. "By reducing the number of SKUs we offer, we'll reduce our costs," he said. "This initiative should begin to contribute to margin improvement in fiscal 2008. Our goal is to reduce the number of SKUs for Remington by 30 percent by the end of next year."
The CEO also said he believes that Remington is in a good competitive position going into the holiday season. Remington is "the value alternative" in shavers, he said. "Norelco and Braun have a lot of products over $100 at retail, but we're in the $40 to $50 range. Plus, we have a lot of interesting products in shaving and men’s grooming. The new Code, CleanXchange and upgraded classic Remington Shaver got good retail acceptance this year. The consumer may not want to spend $179 on a shaver, but our shavers are right in his range."
