UPDATE 2-Energizer loses 2 battery accounts, will buy a J&J business
* Keeps profit forecast due to restructuring savings
* Sets deal to buy J&J's feminine care brands for $185 million
* Profit per share of $1.57 tops Wall Street view of $1.32
* Plans to raise dividend by 25 percent
* Shares down 4.2 percent
July 31 (Reuters) - Energizer Holdings Inc said on Wednesday that two U.S. retailers planned to stop selling its batteries, adding pressure to its sagging sales, while faster savings from its restructuring allowed it to maintain its profit forecast.
The company also said it planned to buy Johnson & Johnson's feminine care brands in the United States, Canada and the Caribbean for $185 million.
The acquisition of the o.b. tampon, Stayfree pad and Carefree liner product lines would give Energizer greater heft against Procter & Gamble Co and Kimberly-Clark Corp's feminine care brands.
Shares of Energizer were down 4.2 percent at $100.54 in late morning trading.
While Energizer is best known for its namesake batteries, it derives a larger percentage of sales and profits from its personal care products, such as Schick razors, Banana Boat sunscreen and Playtex tampons.
Energizer also reported a much higher-than-expected profit despite a slight drop in sales, and it announced plans to raise its quarterly dividend by 25 percent to 50 cents per share.
The company said it expected sales in its household products division, which makes batteries and flashlights, to fall by more than 10 percent in the current fiscal fourth quarter. The biggest reason for the decline is that two unnamed U.S. retailers will no longer sell those products, Energizer said.
While Energizer did not say which retailers were dropping its batteries, executives on a conference call suggested that the losses had to do with retailers that focus on one exclusive brand or the other. Typically, warehouse club stores carry only one name brand, with Costco Wholesale Corp selling P&G's Duracell and Wal-Mart Stores Inc's Sam's Club selling Energizer.
Early last year, Energizer lost shelf space for batteries at the Walmart chain, which it said was a short-term issue.
Wal-Mart is Energizer's biggest customer, accounting for about 20 percent of the company's fiscal 2012 sales. Representatives for Wal-Mart's Walmart U.S. division and its Sam's Club chain were not immediately available for comment.
The acquisition of J&J's brands could help Energizer gain attention in the feminine care aisle, often dominated by P&G's Always and Tampax brands, and other rivals such as Kimberly's Kotex. Energizer first entered the feminine care business in 2007, when it acquired Playtex Products Inc.
Energizer said it expected the deal to close this quarter and that it should add modestly to earnings next year. Goldman Sachs was the company's financial adviser on the acquisition.
Energizer said it had earned $87.2 million, or $1.38 per share, in the third quarter ended June 30, up from $70.2 million, or $1.06 per share, a year earlier.
Adjusted earnings, which exclude items such as restructuring costs, rose to $1.57 per share from $1.18 and came in well ahead of the analysts' average forecast of $1.32, according to Thomson Reuters I/B/E/S.
The results benefited from better-than-expected restructuring savings, a decline in advertising and promotion expenses and a lower-than-expected tax rate, said BMO Capital Markets analyst Connie Maneaty, who has a "market perform" rating on the shares.
Sales slipped to $1.11 billion from $1.12 billion, missing the analysts' average forecast of $1.14 billion.
The company said competitors' promotions and a wet summer had curbed demand for products like suntan lotion. Sales in the personal care division fell 3.6 percent to $649.5 million.
Energizer said it still expected fiscal-year adjusted earnings of $6.75 to $7.00 per share, helped by additional savings from the restructuring it announced in November.
The St. Louis-based company's plans include cutting more than 10 percent of its workforce. It now expects to save more than $80 million this fiscal year, up from a May target of $50 million to $60 million.
After posting double-digit percentage increases in adjusted earnings per share for two years, Energizer said it expected to report mid-single-digit growth in fiscal 2014.