Matrixx reports Q2 decline but hopes new campaign will boost business

SCOTTSDALE, Ariz. Matrixx Initiatives on Monday reported a decline of 17% in net sales to $21.3 million for the company’s second quarter ended Sept. 30. The decline, Matrixx president and CEO Bill Hemelt explained to analysts Tuesday morning, represented a course correction of sorts. The sales decline was “due to lower upfront buys by retailers,” Hemelt said. Last year, all of the hype around H1N1 drove retailers to heavily stock in cough-and-cold supplies. This year, that industry level has dropped to more historical levels, Hemelt suggested, particularly across the drug channel.

Hemelt shared with analysts the company’s new advertising campaign, which begins airing in earnest a week following the November elections. The new campaign features three iconic TV moms — "The Brady Bunch’s" Florence Henderson, "Family Ties’" Meredith Baxter and "Seinfeld’s" Estelle Harris — who make up the “Mom Squad” and save cold sufferers from various treatment myths, such as “freezing out” a cold or consuming onions to help relieve the cold.

“We believe our new creative will continue to differentiate our products from general symptom relief products and help increase consumer awareness,” Hemelt said. “All of these [initiatives] will be supported by strong retail marketing support that has already begun,” Hemelt added during his conference call with analysts.

Last week, Matrixx released a new national survey of U.S. adults that found the majority of Americans are misinformed about what causes the common cold, and how and when they should treat it. Nearly three-quarters of consumers (72%) believed there was not much they could do about a cold except mask the symptoms and wait it out. The top five myths about colds that pharmacists reported were most difficult to debunk:

• Antibiotics can kill the germs that cause colds;


• Changes in the weather can cause colds;


• Getting wet and chilled can cause colds;


• Sitting in a draft can cause colds; and


• Avoiding changes in temperatures will help prevent colds.