DURACELL DAMPENS GILLETTE QUARTERLY EARNINGS

Battery Sales Down 3% Despite Heavy Promotion

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CINCINNATI (AdAge.com) -- Gillette Co.'s long-troubled battery business continues to drain some of the charge from the rest of the company, as losses related to the heavy promotion of the Duracell brand partially offset first-quarter gains posted in razors and toothbrushes.

Overall, Gillette's

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net income was up 22.5% to $223 million, or 21 cents a share, on a sales increase of 6.8% to $1.7 billion. But Duracell sales were down 3% to $332 million as heavy coupon and retail price promotion more than offset a 6% volume increase.

Duracell lost $1 million in the quarter.

Gillette increased overall company ad spending by "double digits," said Chief Financial Officer Charles Cramb, though he did not further specify the amount.

Chairman-CEO James Kilts blamed some of Duracell's loss on the usual downturn in first-quarter sales following the holidays and said the business should return to the black later this year.

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