Gillette, hurt overseas, says will miss Q2 targets
BOSTON, June 17 (Reuters) - Leading razor blade maker Gillette Co. (NYSE:G - news) said Thursday it would report weaker than expected results for its second quarter because of disappointing sales of its Braun, stationery and toiletries products and a stubbornly slow recovery in overseas markets.
The huge consumer products group, which slashed 4,700 jobs last September as demand fell for its goods outside the United States, said it would report a low single-digit increase in second-quarter sales versus a year ago. Earnings would fall about 20 percent from the 33 cents per share it earned in the 1998 period, to about 26.4 cents per share, down from the consensus Wall Street estimate of 29 cents per share.
Gillette said in a statement it should return to ''more traditional'' sales and profit growth rates by the end of 1999, helped by new products in the second half of the year. But for now, Brazil, Germany, Japan and Russia have yet to show a recovery that Gillette anticipated.
''International markets have been a key growth area for this company...It really is key for us when we see this continued stagnation or deterioration in some cases...,'' in overseas markets, Joan Gallagher, a Gillette spokeswoman, told Reuters.
She also cited the euro, Europe's fledgling currency that has fallen since its inception earlier this year and makes U.S. products more expensive, for the company's cautious outlook overseas, where it generates about two-thirds of its sales.
On the positive side, Gillette said its MACH3 shaving system was delivering better-than-expected results for its razor and blades business, the company's largest unit and its Duracell Ultra and Oral-B CrossAction toothbrush were improving their market shares. It also announced an expanded share repurchase program -- buying back an additional 25 million shares over the next 12 to 18 months after completing 50 million shares repurchased by the end of this year as part of a 50-75 million share buyback program. |
