BOSTON – Consumer products maker Gillette Co. on Friday reported a 16 percent decline in third-quarter net income as steps to reduce retailers' inventories and increased spending on marketing weighed on results.
The company also said profits at its Duracell battery unit, long a drag on earnings, dropped 55 percent as economic weakness in Latin America and inventory reductions offset a 1 percent increase in sales.
Gillette, which also makes Oral-B toothbrushes and Mach 3 razors, posted net income of $296 million, or 28 cents a share, compared with $350 million, or 33 cents a share, a year earlier.
Analysts had forecast earnings of 25 cents to 31 cents a share, with an average estimate of 28 cents, according to research firm Thomson Financial/First Call.
Revenue rose 2 percent to $2.36 billion.
Overall, Gillette said inventories were down $77 million from a year ago.
In the third quarter, razor and blade sales rose 7 percent to $915 million, although profits fell 4 percent due to inventory reductions and increased marketing spending, the company said.
The inventory reductions and increased marketing spending are part of Gillette's long-term plan to improve its business. While financial analysts see the moves as positive steps, they carry costs that reduce profit in the near term.
Sales of oral-care products rose 7 percent to $328 million, with profits up 6 percent.