(Bloomberg) -- With sales growth harder to come by, Edgewell Personal Care Co., the owner of Schick razors, is cutting costs by using less plastic in some razor blade handles.
It’s part of a larger effort by the owner of Banana Boat sunscreen that’s allowing it to boost profitability despite lower demand. The company is also automating packaging at a plant that makes tampons and pads, reducing labor costs.
“We’ve been able to take some costs out looking at weights of materials,” Chief Executive Officer Rod Little said in an interview. In its most recent quarterly report, Edgewell said its adjusted earnings for the full year will be at the top of the expected range, even though it now sees organic net sales growing more slowly. Little added that profits are also being helped by lower transportation costs and oil prices that were less than expected.
Like a number of peers from Clorox Co. to Procter & Gamble Co., Edgewell’s sales are under pressure as consumers trim spending at the grocery story. Edgewell’s revenue slipped to $647.8 million in the three months ended June 30, trailing analysts’ average estimate.
“Consumers are being very careful on what they’re spending on the everyday basket,” Little said. Shoppers are under pressure from rent and insurance expenses, and are in many cases making a concerted effort to save up for travel, entertainment and leisure activities, he added. As a result, they’re switching to less-expensive brands, and in some cases, just buying less.
This means consumers are “using products maybe a little longer than they had before, looking for a little bit better price point,” he said.
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