The Procter & Gamble Co.’s first-quarter organic beauty sales rose 5 percent to $4.4 billion — and the consumer products giant said there’s plenty more growth to be had.
Hair care, personal care and skin care, all of which live under the beauty umbrella, each saw a midsingle-digit increase in organic sales. And the division’s earnings before interest and taxes increased 1 percent to $1.1 billion.
In the grooming business, which includes brands like Braun, Gillette and Venus, organic sales were up 5 percent to $1.9 billion with EBIT up 6 percent to $619 million.
While going over P&G’s quarterly results with analysts on a conference call, chief financial officer Andre Schulten presented a picture of a company that is very much on the move.
“What we are changing is nearly every part of our execution framework to identify superiority gaps even faster and respond quickly to changes needed to product, package, communication, retail execution or value to ignite user growth of our brands,” he said.
He said those adjustments are starting to take hold and, to prove it, pointed to the Pantene Abundant & Strong line of hair care products.
“More than 50 percent of women will experience noticeable hair loss in their lifetime,” Schulten said. “In the United States alone, female pattern hair loss affects approximately 30 million individuals. Pantene Abundant & Strong technology grew from research linking scalp oxidative stress to poor scalp conditions and hair quality.
“This led to the development of a content bundle and strong collection with a provitamin complex proprietary formulation,” he said. “Consumers are delighted with improvements in hair strength and less shedding … and a tingling sensorial experience in the shower — is delivering midsingle-digit sales growth in the U.S. and is growing share.”
Schulten said the company is about 60 percent down the path of fixing its category-country combinations.
“We’re running at 29 out of 50 top category-country combinations growing or holding share,” he said. “We need to conquer the rest, and that’s the task ahead. I’ll tell you, our beauty team isn’t content with 5 percent of growth. There’s way more opportunity in that space that we need to capture.”
Asked on the call about P&G’s business in China, the CFO described it as “in the middle of reinvention.”
“It’s not growing,” he said. “We need to get it back to growth, similar to North America.
“We’re not firing on all cylinders yet. But we’re very happy with the China structural progress, and I have very high levels of confidence that we will fix the remainder of the portfolio and see even more sustained growth in China in a difficult market because market growth is still below 100 in our channels and categories.
“Quite frankly, consumer sentiment is not improving. So a big congratulations to the China team for winning in a tough environment,” he said.