Consumer products maker Gillette today reported a 16 per cent 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 per cent as economic weakness in Latin America and inventory reductions offset a 1 per cent increase in sales.
Gillette, which also makes Oral-B toothbrushes and Mach 3 razors, posted net income of $296 million, compared with $350 million a year earlier.
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 per cent to $915 million, although profits fell 4 per cent 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.