Competition for women's attention is heating up in the feminine-care market, but it's not paying off yet for
The Westport, Conn.-based company earned $11.4 million, or 19 cents a share, in the quarter ended March 29, compared with $16.1 million, or 26 cents a share, in the prior-year period. Analysts were expecting 21 cents a share. Total sales were down to $180.9 million from $196.8 million.
Its shares were down 12% at $7.70 early Tuesday.
"The first-quarter results reflect the impact of extensive competitive spending in the tampon category behind the launch of a new entry in the plastic applicator segment and our longer-term defensive efforts," said Chief Executive Michael R. Gallagher. "We have significantly increased advertising spending in the first half of the year in order to support our new product launches as well as defend and build our plastic tampon franchise. Naturally, this impacts our operating results in the first half."
Looking ahead, the company updated its 2003 guidance, and Gallagher said: "We expect there may continue to be some disparity between shipment and consumption trends in Feminine Care into the next quarter." The company expects low single-digit top-line growth and earnings of 80 cents to 85 cents for the full year. For the second quarter, earnings are expected to be 22 cents to 25 cents, reflecting flat to low single-digit top-line growth.
Analysts expect 88 cents a share, on average, in 2003, while the company earned 90 cents a share in 2002. For the second quarter, analysts expect 34 cents a share; the company earned 32 cents a share in the prior-year quarter.