P&G posts stronger quarterly results, but beauty still fails to shine

Procter & Gamble continued to post stronger quarterly results, with profits also bouncing back, but both beauty and grooming sales are down as the company continues to fight in order to maintain its market share in these categories.

The company said that net sales for the quarter were up 2 percent to $20.6bn, which represented an organic sales increase of 3 percent when taking in the negative impact of currency exchange rates.

Net income for the January-to-March quarter rose to $2.57bn, compared with net income of $2.41bn in the corresponding period last year.

This reflected the fact that the company either maintained or grew its share of the market in 50 percent of its sales worldwide, while this figure came in at around two-thirds for its performance in the US market.

Looking to make further gains from innovation and portfolio expansion

CEO Bob McDonald said that the company was now on track to repurchase $6 billion worth of stock, while it is also looking to gain further top-line improvement for the fourth quarter on the back of innovation and portfolio expansion.

Drilling down the into results revealed that the company’s personal care operations were far from being the driving force behind that growth.

In the beauty segment, the company reported that sales volumes were down by 1 percent, while net sales were down by 2 percent and 1 percent in organic terms, in what was described as a period of ‘heavy competitive product and promotional activity’.

On the plus side, the results showed that salon professional sales increased thanks to strong innovation performance, while higher pricing and manufacturing savings did help boost net earnings growth.

Sales down for grooming on tough competition

For the grooming segment, sales volumes were down 2 percent, while net sales were also down by 2 percent, and up 2 percent in organic terms.

The company reported that sales of blades and razors increased in the category, while these gains were negated by the fact that net sales of appliances fell due to market contraction and added competition.

The results in the grooming and beauty divisions were counterbalanced by a stronger performance in the baby and family care segment, where net sales grew by 2 percent, and the health care segment, where sales grew by 8 percent.

On the back of the results the company said it was maintaining organic sales growth for the fiscal year of between three and four percent, while it is expecting the impact of currency translation to impact sales by approximately 2 percent.