The Procter & Gamble Co. gracefully sidestepped consumers' proverbial belt tightening in the second quarter, posting a group profit gain of 14 percent.
During a conference call Thursday, the consumer products giant also said it plans to exit its $1.6 billion coffee business and establish a separate company called The Folgers Coffee Co. The new company will have its headquarters in Cincinnati, as does P&G, and will employ about 1,250 people at four sites in the U.S. P&G expects to determine the deal structure this spring and complete the transaction in the July to December period.
The firm's beauty segment posted net earnings that gained 10 percent to $883 million on a sales increase of 10 percent to $5.1 billion and organic sales growth of 5 percent.
The firm's net earnings for the quarter ended Dec. 31 climbed 14 percent to $3.3 billion, or 98 cents a diluted share, from $2.9 billion, or 84 cents, in the prior year on sales that gained 9 percent to $21.6 billion from $19.7 billion.
The company said its brands — ranging from Crest toothpaste to Bounty paper towels — are well positioned to weather an economic downturn and rising commodity and energy costs. To offset these rising costs, P&G said it has a number of price increases planned. The company will raise prices across 40 to 50 percent of its business, affecting mostly household items and a lower percentage of beauty products. It expects to reap the benefit of these increases this spring.
During a conference with analysts, chairman and chief executive officer A.G. Lafley said, "This is the third or fourth year in a row that we've had to increase prices," adding that rising oil prices is not a new challenge. "We almost always increase price with innovation as opposed to naked price increases."
Clayt Daley Jr., vice chair and chief financial officer, said the beauty businesses' organic sales were driven by the double-digit growth of prestige fragrances, including Hugo Boss and Dolce & Gabbana, and volume growth of Olay's Definity and Regenerist lines. Hair care volume was up in low-single digits. The firm said its restage of Pantene in the U.S. didn't gain as much traction as expected, but there were more innovations planned for later this year to boost the stalwart hair care brand. Lafley also expressed excitement for this month's launch of Nice 'n Easy Perfect 10, a 10-minute at-home hair color that he said marks the biggest innovation in the category in decades.
There'll be no rest for those headed to Europe for men's, as Paris just closed the gap with Milan. According to a provisional calendar released by the Chambre Syndicale, Paris Men's Week will now open a day earlier on January 16. See new highlights on the official lineup on WWD.com. #wwdnews #wwdfashion (📷: @kukukuba)
BREAKING: Jonathan Saunders is leaving @DVF. The designer has resigned from his position as chief creative officer of Diane von Furstenberg, the company said in a statement on Friday. At the time of his hire, von Furstenberg said Saunders’ arrival symbolized and facilitated her stepping back from the day-to-day duties that occupy the work of a full-time creative director. The British designer joined DVF in May 2016 and was in charge of all product categories. #wwdnews
For @versace_official’s spring ad campaign, the brand emphasized the archival prints from the spring tribute collection dedicated to the late Gianni Versace. Closing out the show were five of Gianni’s favorite models: Cindy, Naomi, Carla, Helena, and Claudia. Bowing on December 18, the new campaign is yet another tribute to supermodel-dom as the images by Steven Meisel are fronted by @iamnaomicampbell, @cturlington, @gisele and more. #wwdfashion
Four-time Oscar-nominated actress Annette Bening has been waiting 20 years to play Gloria Graham in "Film Stars Don't Die in Liverpool," which will be released on December 29. The movie about Graham – a Hollywood star known for her controversial relationship with a younger Englishman named Peter Turner – is based off a memoir Turned wrote. "She felt vulnerable to him, because she loved him, she really did love him. And anyone that we really truly are in love with, we re vulnerable to in a very deep way," said Bening. Read our full interview with the modern icon of an actress on WWD.com. #wwdeye (📷: @ninebagatelles; Styled by @cristinaehrlich)
The crisp white button down: a staple that can be dressed up or down and accessorized throughout the decades. Here, on a Art Basel-goer in 2017 on the left and on the iconic Audrey Hepburn in “Roman Holiday” in 1953 on the right. #tbt #wwdfashion (📷: Andrew Morales)
Known for her work with @victoriassecret, 25-year-old model @georgiafowler is raising her profile in Hollywood. Fowler stars in @vincecamuto’s holiday campaign, which launched in partnership with “Pitch Perfect 3.” “Almost every shoot with Vince Camuto, I’ve had to face a fear…It was definitely a challenge. I’m so grateful for it, though. I’ve always wanted to be a pop star, so that was the perfect chance,” Fowler said. Head to WWD.com to read about Fowler’s experience modeling, including at the #VSFashionShow, and her relationship with Nick Jonas. #wwdeye (📷: @jilliansollazzo)
EXCLUSIVE: Huda Kattan just became the first beauty influencer to land a major beauty deal. Kattan's business, @hudabeauty, has received a minority investment from private equity firm TSG Consumer Partners. The brand, which industry sources say is on track to do $200 million in retail sales for 2017, will receive support on product, retail and geographic expansion through the deal. Get all the details on the deal and read @_a_collins' interview with Kattan on WWD.com. Link in bio. (📷: @jgreenery) #wwdbeauty #wwdnews
Peruvian model @juanaburga_official – who is known for walking the runways of @rodarte, @viviennewestwood and @torybuch – is making the move to the big screen with drama “Los Últimos.” The film premiered in Argentina in November and arrives in the U.S. and Europe in 2018. On making the switch from modeling to acting, Burga told WWD: “It’s a completely different thing – a lot of people think it’s similar or try to connect things, especially like getting used to the camera or being looked at all the time or playing these different characrers, but film is a completely different story.” #wwdeye (📷: @jgreenery)
London’s newly opened @designmuseum will look back on the life and work of Azzedine Alaïa in a show that the designer helped to curate before he died of heart failure last month. The retrospective, which Alaïa had worked on with Mark Wilson, chief curator of the @groningermuseum, will look at the impact of his work worldwide. The show, “Azzedine Alaïa: The Couturier,” will run from May 10 to October 7. Read more about the exhibit on WWD.com #wwdnews #wwdfashion (📷: @zefashioninsider)