During the third quarter net sales fell by 7% to reach $4.7bn, underscored by a 12% hit from foreign currency exchange – an issue that has been impacting the performance of all US-based multinationals during the course of the past year.
Underlining the impact of currency exchange, the company noted that organic sales during the period increased by 5%, which included a 10% increase in sales from emerging and developing markets, as well as a 7% gain in personal care sales from North America.
Results surpass analysts' expectations
While net income fell by 8%, from $562m to $517m, both the sales and net profit figures surpassed Wall Street expectations, leading to a small surge in the company’s share price.
"We delivered another quarter of good financial results. Organic sales grew mid-single digits, with benefits from targeted growth initiatives, innovations and brand investments. We achieved significant cost savings and improved adjusted gross margin,” said company CEO Thomas J. Falk.
“We are executing well in a challenging environment and are raising the low end of our previous guidance ranges for full-year organic sales growth and adjusted earnings per share."
Personal care performs well
In the mainstay personal care business segment sales for the quarter fell by 5%, with currency headwinds impacting the results by 13%, with sales from developing and emerging markets being impacted by a hefty 25%.
However, this figure was measured alongside a strong underlying performance, with volumes increasing by more than 7% which led to the strong organic sales growth for the division.
Looking ahead to the full-year results, the company is predicting that organic sales growth will be in the 4 to 5% area, which is an improvement on earlier forecasts of a 3 to 5% growth.