SCDigest editorial staff

The News: Spectrum Brands, distributor of such products as Remington razors and Rayovac batteries, told Wall Street this week its currently quarter and full year financial results would suffer, in part due to lower sales from “inventory cutbacks” by retail customers in its lawn and garden segments.

The Impact: We’re not sure how much of this is real, and how much is simply the latest handy excuse, like the “poor weather’” perennially blamed for disappointing retail and certain consumer goods sales.

The Story: Spectrum Brands became the latest consumer goods company to at least partially blame disappointing financial results on changing inventory strategies by its retail customers, at least in the short term reducing the company’s sales.

While Spectrum is most well known for brands such as Rayovac and Remington, a company press release cited “retail inventory reductions on the part of several large customers in the company's lawn and garden category.” Spectrum brands in this area include Garden Safe, Green Earth, Nature’s Miracle, and others. Most of the buzz about retailer inventory policy changes has focused on Wal-Mart and to a somewhat lesser extent Target; while Wal-Mart is also a large force in the home and garden area,  of course, this news could imply focused home products retailers have also found the religion.

As opposed to several other companies, the inventory cutback issue was one of only several factors cited by the company for its poor performance. (See Will Retailer/Wal-Mart Inventory Cut Backs Mean Sales Risk for Consumer Goods Companies?)

While clearly having real impact for some companies in the short term, after this temporary hit, sales for most should rebound to previous levels. It will be interesting to see how long retailer inventory reduction programs are cited to explain less than expected financial results among consumer goods companies.

Do you think the inventory policy changes by retailers really are impacting consumer goods company sales? The impact should be primarily short term for most though, right? Or will it have a more lasting impact? Let us know your thoughts.