Second half of cold season holds promise

SCOTTSDALE, Ariz. — Cough-cold supplier Matrixx on Thursday credited tough comparisons against the prior season’s high pre-season inventory purchases by retailers due to the publicity of the H1N1 flu outbreak for the lower level of sales for the quarter ended Dec. 31, 2010.

The company reported net sales of $20.3 million, down 29%. However, a lift in late December cough-cold illness rates holds promise for the second half of the season.

“We began to see increases in consumer purchases of our products during [late November, December] as new advertising commenced and the incidence of illness surpassed last year's illness level,” said Bill Hemelt, Matrixx president and CEO. “Retailers continued to trim their inventory levels in comparison to last year; however, we believe retailers' inventory of our products has reached a point where they will increase purchases to offset the increased consumer takeaway,” he said.

“For the four weeks ended Dec. 26, 2010, retail unit sales (three-outlet syndicated scanner data, not including Walmart or club stores) of Zicam Cold Remedy oral delivery products increased approximately 30%, while the total cough-cold category increased approximately 5% compared to the prior year," Hemelt added. "For the full fiscal year ending March 31, 2011, we anticipate revenue increasing 3% to 5% above the $67.3 million achieved in fiscal 2010."