Energizer Gets in Touch With Its Feminine Side
Maybe we should have guessed it from the Energizer Bunny's pink fur, but battery maker Energizer Holdings is about to get more in touch with its feminine side.
Although it's probably best known for its Energizer and Eveready brands of consumer batteries, personal care products actually comprise the biggest source of the company's revenues, some 58% of total net sales and 53% of operating profits last quarter. Feminine care products, however, have comprised just a small component of those revenues (4%), until now.
Energizer has announced it will be buying Johnson & Johnson's feminine hygiene products business for $185 million cash that it will roll into its existing Playtex division, which it acquired in 2008. Included will be Stayfree pads, Carefree liners, and the o.b. tampon brands in the U.S., Canada, and Caribbean, which currently enjoy some $250 million in annual sales. J&J will also throw in its Canadian manufacturing facility with it.
Energizer's feminine care business, like several of its other divisions, could stand a visit from the pink bunny. Revenues fell 8% last quarter to $46 million as promotional activity like couponing sapped strength, but overall it also blamed wetter weather on falling sales in products like sun care. With a broader product portfolio, however, Energizer is looking to capitalize on the greater sales opportunities it will develop. It notes having the ability to stock a whole endcap in a retail store with your products rather than just a shelf has a better chance of enhancing operating performance.
The feminine hygiene market has been shrinking despite a bewildering array of products on the store shelves (OK, bewildering to me), with sales falling 2% last year in the sanitary protection segment. Energizer's results have been indicative of that decline and though J&J's women's health segment also saw revenues decline 2% in its March quarter, much of that was due to currency fluctuations. Operationally, sales inched up just under 1%.
So Energizier will have its hands full taking on industry leader Procter & Gamble , which owns the sanitary protection market with a 47% share, more than twice as much as its nearest rival Kimberly-Clark . Sales of feminine care products accounted for 6% of P&G's $83.7 billion in global revenues in 2012.
That's a big lead to surmount, suggesting Energizer can only hope sales will multiply quick like a bunny. But with several more well-known brands now in its portfolio, the consumer products company can at least keep going and going and going on its quest to achieve greater market share.
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The article Energizer Gets in Touch With Its Feminine Side originally appeared on Fool.com.Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool recommends Energizer Holdings, Kimberly-Clark, and Procter & Gamble. It recommends and owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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