ENERGIZER CEO TO STEP DOWN, SUCCEEDED BY COO
CINCINNATI (AdAge.com) -- Energizer Holdings announced yesterday that CEO Pat Mulcahy will step down in January, to be succeeded by Chief Operating Officer Ward Klein.
The news came hours before Energizer announced results for its fiscal fourth quarter in which earnings soared 83% to $60.33 million, largely on the strength of U.S. battery sales driven strongly by Florida hurricanes and low-cost, heavy-duty batteries, though sales for Schick-Wilkinson Sword razors fell 3%.
Mr. Mulcahy, 59, will stay on as a board member, and William Stiritz, 69, will remain non-executive chairman. Mr. Klein, 48, a former chief marketing officer of Energizer, has been chief operating officer since January.
"While a surprise, we think Mr. Mulcahy's retirement and Mr. Klein's assumption of the CEO role should be a relatively smooth transition for the company and does not change our long-term outlook for the company," said Banc of America Securities analyst Joe Norton in a research note.
Energizer sales rose 7% to $756.2 million, all driven by battery sales, which were up 16% in North America. Energizer estimated its share of its core premium alkaline battery market rose 1.5 points in the U.S. But its alkaline sales rose only 6%, with soaring sales of low-priced, zinc-carbon heavy-duty batteries, which have become increasingly popular at dollar stores and mass merchants, accounting for the vast majority of the quarter's sales gain.
In razors, where Schick has engaged dominant rival Gillette in a war of new products since Energizer acquired the brand in March 2003, sales declined 3% to $226.5 million and earnings plummeted 38.7% to $14.4 million. Those numbers compare to a year-ago period in which Schick was first shipping its Quattro razor to retailers.
Omnicom Group's TBWA/Chiat/Day, Playa Del Rey, Calif., handles Energizer and WPP Group's J. Walter Thompson, New York, handles Schick.