Sales & Earnings In Brief
This article was originally published in The Tan Sheet
Executive Summary
Glaxo previews streamlined consumer unit
Glaxo previews streamlined consumer unit While GlaxoSmithKline Consumer Healthcare sales increased 7% to $2.18 billion (£1.32 billion under the April 27 exchange rate) in the first quarter, the business would have grown 11% without the brands slated for divestment, the U.K. firm says. "You're going to see a very significant change in the way Consumer operates," in terms of profitability and competitiveness once alli and other OTCs are sold, CEO Andrew Witty said (Also see "GlaxoSmithKline's OTC Garage Sale Includes alli, FiberChoice" - Pink Sheet, 18 Apr, 2011.). U.S. consumer sales increased 1% to $397.1 million, with the strong performance of Sensodyne, Tums and Biotene offsetting lower sales of alli and Aquafresh. Globally, the rollout of Sensodyne Rapid Relief helped drive oral care 12% higher to $701.9 million (Also see "Glaxo's Sensodyne With NovaMin Aims At Oral Care Sensitivity Competition" - Pink Sheet, 7 Mar, 2011.). Merck consumer sales grow 6% Merck's consumer product business is "very complementary" to the Rx business, but also provides leverage for divestment or expansion, CEO Kenneth Frazier says. The Whitehouse Station, N.J., pharma April 29 reported its fiscal 2011 first-quarter consumer product sales grew 6% to $517 million, led by the Claritin antihistamine and Coppertone sun care lines, both added in Merck's 2009 merger with Schering-Plough. Merck's total revenues were flat at $11.6 billion, but the firm raised the lower end of its full-year per-share earnings guidance by 2 cents to $3.66 to $3.76. Growth in consumer sales in the January-March period was key for Merck as Rx sales growth was 2% to $9.8 billion. Frazier said consumer sales complement Rx sales in emerging markets, where Merck uses the same distribution channels for both products. Merck will consider divesting or expanding its consumer business, said Frazier (Also see "Merck's Frazier Promoted To CEO To Drive Post-Schering Success" - Pink Sheet, 6 Dec, 2010.). "We will be looking for opportunities to grow our presence in the consumer space if that is what we believe will create long-term shareholder value," the CEO said, but added, "I am not ruling anything out." DSM gains from Martek but raises prices Martek Biosciences added $54 million (€37 million) to the Dutch ingredient firm's first-quarter Nutrition sales, up 9% to $1.16 billion. Royal DSM N.V. said the Nutrition unit's earnings before interest, taxes, depreciation and amortization grew 4.2% to $252.4 million, including $17.5 million from Martek; growth was offset partially by the strong Swiss franc and rising material costs. With Nutrition's EBITDA margin falling to 21.7% from 22.7%, execs said April 27 DSM is rolling out 10% to 15% price increases for many nutritional ingredients. DSM closed the Martek deal in February and continues integrating the Columbia, Md., maker of life'sDHA (Also see "DSM Nutrition's Hamilton Sees Complementary Benefits In Martek Deal" - Pink Sheet, 21 Mar, 2011.). Overall DSM net sales climbed 15.6% to $3.26 billion in the quarter, with net profit up 27.7% to $242.2 million. Homeopathy, sports boost Vitamin Shoppe The supplement and natural health product retailer reports a 13.9% jump in first-quarter net sales, to $216.9 million, while net income climbed 32.8% to $11.6 million. Vitamin Shoppe execs said during an April 26 earnings call the strong performance of homeopathics, sports nutrition and bath & beauty products drove growth. New senior managers, including CEO Anthony Truesdale, took the reins at the North Bergen, N.J., firm following the quarter ended March 26 ( (Also see "People In Brief" - Pink Sheet, 28 Feb, 2011.), People In Brief). Vitamin Shoppe reported sales at comparable established stores increased $13.5 million or 8.1% in the first quarter, during which the chain added a net 13 locations; the 500th Vitamin Shoppe store opened in the second quarter. USANA makes adjustments in China USANA Health Sciences plots strategic changes in its BabyCare Chinese subsidiary, looking to promote growth in what the firm considers its "most significant" market for growth. The Salt Lake City direct-seller of nutritional products said April 26 sales in its Asia Pacific region increased 42.6% in the first quarter to $83.5 million, offsetting USANA's still-stagnant performance in North America, where sales were flat at $60 million. Improved profit margins helped lift net earnings to $11.4 million, a 17.7% gain. Chief Financial Officer Jeff Yates said USANA will redirect some resources from Hong Kong to greater China, where the firm hopes to see "meaningful growth" by year's end. Allegra reaches No. 2 with $118.6M in sales Allegra OTC sold $118.6 million (€80 million according to April 28 conversion rates) during Sanofi-Aventis' fiscal 2011 first quarter. Since subsidiary Chattem Health Care launched Allegra OTC in the U.S. in March, the allergy reliever bumped competitor Zyrtec from the No. 2 spot, an executive said during an April 28 earnings call (Also see "News In Brief" - Pink Sheet, 14 Mar, 2011.). The strong performance helped drive up first-quarter Consumer Health Care sales 40.3% to $1.05 billion. Recent acquisitions of consumer health businesses in China "played a minor role" in the growth, the executive said (Also see "Sanofi Acquires BMP Sunstone To Expand Chinese Consumer Health Portfolio" - Pink Sheet, 1 Nov, 2010.). Consumer Health Care sales in emerging markets grew 30.3% to $446.2 million. Mead Johnson ups guidance on global sales The manufacturer of Enfamil and pediatric nutritionals raises its full-year earnings per share guidance from $2.55-$2.65 per share to $2.62-$2.70 per share. Strong sales in Asia and Latin America, 64% of the Glenview, Ill., firm's sales in the fiscal 2011 first quarter, grew to $576.9 million. The 27% growth continues a trend of ex-U.S. growth for the firm ( (Also see "Sales & Earnings In Brief" - Pink Sheet, 31 Jan, 2011.), Sales & Earnings In Brief.) Sales in the North America/Europe segment grew 5% to $322.9 million. The firm is reaping higher sales in the U.S. from Abbott's Similac recall as well as new product launches. Executives said April 28 U.S. consumption likely will fall due to cuts in federal infant nutrition programs and declining birth rates, which the firm does not expect to rise again until at 2012 at the earliest. The firm also announced a 4% price increase in the U.S. to begin later this year. GNC sales up in first quarter General Nutrition Centers April 28 reports net sales up nearly 9% to $506 million. However, one-time costs sent net income down to $9.9 million for the three-month period, a sharp drop from $25.7 million in the year-ago quarter. Most were non-recurring costs related to the Pittsburgh firm's $1.3 billion refinancing and IPO, which it completed April 6 ( (Also see "In Brief" - Pink Sheet, 11 Apr, 2011.), In Brief). The specialty retailer said same-store sales were up 7.5% and brand extensions with PetSmart and Sam's Club now contribute to sales. |