Wall Street’s getting antsy for the Procter & Gamble Co. to innovate its way into better market share.
The consumer giant’s profits in beauty rose 3 percent to $523 million in the third quarter as sales inched up 1 percent to $4.8 billion. And the SK-II skin care line became the first brand in the firm’s prestige beauty division to chalk up more than $1 billion in annual sales.
RobertMcDonald, chairman, president and chief executive officer, acknowledged on a conference call Friday that the company can do better and batted away tough questions from Wall Street analysts, some of whom want P&G to move faster.
Ali Dibadj, an analyst at Sanford C. Bernstein & Co., asked: “How long do you expect investors to wait? How long does your current plan have to work? How much patience does the board have?”
McDonald said he was happy with the steps the beauty business has taken to keep its offering moving forward.
“Obviously, we’ve underperformed in beauty care for some time now,” McDonald said. “We’ve worked to improve the innovation program; it does take some time, but I think you’ll see sequential improvement quarter-to-quarter as we go forward in beauty care. We have reviewed this within the company, and within the leadership of the company, and we’re working hard on doing that.”
McDonald said the North American beauty business in particular had not shown enough innovation. “We’ve had some great innovations...the facial hair removal innovation on Olay, but the base brand needs innovation and that’s what we’re focused on now,” he said.
P&G beauty’s organic sales grew 2 percent in the quarter, with a volume increase of 1 percent and a pricing boost of 5 percent.
Global skin care shipments were down by midsingle digits, with developing markets seeing roughly flat shipments.
“We had some challenges in markets like China,” said P&G treasurer Teri List-Stoll. “In North America, volume declined due to significant competitive activity in the midpriced area. We’re taking steps to address these trends by introducing six new items into the midtier antiaging and cleansing segments and starter kits across the Pro-X lineup.”
Overall, net earnings attributable to P&G fell 16.1 percent to $2.41 billion, or 82 cents a diluted share, from $2.87 billion, or 96 cents, a year earlier. Sales for the three months ended March 31 rose 1.5 percent to $20.19 billion from $19.89 billion. The firm’s adjusted earnings of 94 cents came in 1 cent ahead of analyst estimates.
But the company projected adjusted earnings for the year of $3.82 to $3.88 a share where Wall Street was looking for profits of $3.96. The stock fell 3.6 percent to $64.44.
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye
“It’s passion that helps get anybody to a certain point and it’s what’s propelled me,” said Kith founder @ronniefieg, one of WWD’s 40 under 40: a group of industry notables who are changing the face of retail, fashion and beauty. Fieg, who opened a Manhattan flagship on October 7, began his career at age 13 as a stock boy and salesman for footwear chain David Z. “I think staying true to [my] beliefs, hard work and passion have gotten me to where [Kith] is today.” See the rest of the 40 at WWD.com. (📷: @vsteves) #wwd40
25-year-old @samweaving is about to break out this fall, starring in Netflix’s horror film “The Babysitter,” fittingly out today on Friday the 13th. That’s not the only place you’ll be seeing her, though — Weaving’s got a role Showtime’s “SMILF” and another alongside Frances McDormand and Woody Harrelson in “Three Billboards Outside Ebbing, Missouri.” Though she’s got a full plate at the moment, there’s one role she’s got her eye on: Marilyn Monroe. “I’m a little too young at the moment, but it’s on my bucket list,” the actress told WWD (📷: @dandoperalski) #wwdeye
BFF's Poppy Jamie and Suki Waterhouse celebrated the launch of their bag line Pop x Suki at Nordstrom last night. "The line is really about our friendship, and how we are so different but complement each other," said Waterhouse. 👯 (📷: Katie Jones) #wwdeye
After designing the new @louisvuitton and @bulgariofficial flagships and a @chanelofficial boutique opening in Japan, @petermarinoarchitect has another project on his plate: The Lobster Club. Located in the Seagram Building, it’s the famed architect’s first restaurant project in New York, serving up modern Japanese brasserie-style cuisine. Bronze hues, bespoke material detailing, blush and chartreuse tones and a heavy emphasis on Picasso can be seen throughout. Mark your calendars for Nov. 1 for the much-anticipated opening. (📷: @clint_spaulding) #wwdeye