Personal care appliance maker The Gillette Company reported record net sales, net income, and diluted net income per share for the second quarter and first 6 months of 2005.
The company says the record performance was driven by strong consumer demand for new products, including M3Power Nitro and Venus Vibrance, the strength of established brands, a favorable mix of more profitable premium brands, ongoing overhead cost savings, and manufacturing productivity.
Net sales for the second quarter rose 13 percent to U.S. $2.77 billion from $2.44 billion in the second quarter of 2004. The strong double-digit percentage sales increase came from solid share gains and robust category growth across Gillette's core categories and in all regions, with notable growth in the developing markets of Latin America and Eastern Europe. In addition, strong growth was achieved in North America despite comparison with a strong second quarter last year, when M3Power was launched.
Net income for the second quarter rose 17 percent to $498 million compared to $426 million in the second quarter in 2004. Diluted net income per common share increased to a second-quarter record of $0.49, up 17 percent from $0.42 in the previous year.
For the 6-month period, net sales grew 15 percent to $5.38 billion, compared with $4.68 billion in 2004. Net income for the six months was $946 million, 18 percent above the $802 million last year, or an increase of 19 percent to $0.94 from $0.79 in diluted net income per share.
"These record results, our eighth consecutive quarter of record net sales, earnings and earnings per share, give us strong momentum going into our merger with Procter & Gamble, which was overwhelmingly approved last month by shareholders," said James M. Kilts, chairman, president and CEO.
"We have achieved tremendous gains in manufacturing productivity and overhead savings, which have provided the resources for broad-based innovation. We also have growing strength in all core categories, reflecting our powerful marketing programs and great retail execution behind exciting new products like M3Power, Venus Vibrance and the Oral-B Pulsar toothbrush. And we have increased consumer trade-up to better-performing, more profitable brands in markets around the world," he said.
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