Playtex Products, Westport, CT, posted better-than-expected fourth-quarter profit but its shares fell 3% after the consumer products company said that it might have to look at acquisitions to meet its 2008 goals. Playtex, whose products include tampons, Banana Boat sunscreen and Wet Ones hand wipes, also gave an earnings outlook range for 2007 that meets or exceeds expectations.
The company posted profit of $6.5 million in the fiscal fourth quarter ending in December, compared with a loss of $12 million a year earlier. Excluding charges and gains, Playtex earned $4.2 million. Sales of retained brands rose 8% to $137 million. Including the impact of non-core brands, which were divested during the fourth quarter of 2005, sales rose 3%.
Sales of feminine care products rose 3.4% to $56 million. Strong early sales of the Playtex Sport tampon were partially offset by expected weakness in Playtex's other tampons, such as Gentle Glide, as women tried out the new Sport product. The company said that it would introduce larger boxes of Playtex Sport in March to help push its growth in 2007.
During a conference call, chairman and CEO Neil DeFeo said that Playtex still believes it can meet its goals for 2008, but probably cannot achieve them through internal growth alone. Playtex set its 2008 target last February of net sales of $760 million and earnings before interest, taxes, depreciation and amortization of about $180 million.
Mr. DeFeo said that acquisitions, particularly those that would help Playtex expand its international infrastructure, are more attractive, especially in today's financing market. He also said that Playtex was disappointed with its Beyond cardboard applicator tampon, but it is looking at what to do with the product rather than walking away from it.
Results in the latest quarter were driven in part by strong initial sales of a new tampon designed for athletic women, Playtex Sport, which helped to offset higher raw material costs. Sales of Beyond fell in 2006.