NEW YORK — Even in its current, pre-Wella state, Procter & Gamble Co. reaped a large windfall from its beauty business during the fourth quarter.
This story first appeared in the August 1, 2003 issue of WWD. Subscribe Today.
The Cincinnati-based consumer products powerhouse reported that net income for the three months ended June 30 rose 4.9 percent to $955 million, or 68 cents a diluted share, from $910 million, or 64 cents in the year-ago period. Excluding restructuring charges, net income in the quarter would have reached $1.22 billion, or 87 cents a share, exceeding analysts’ estimates of 86 cents a share.
Sales were up 7.4 percent to $10.92 billion from $10.17 billion in last year’s quarter. Beauty care sales rose 10 percent to $3.08 billion during the quarter, but the unit’s top-line growth was dwarfed by its bottom-line improvement. With a 39 percent increase in its share of overall profits, beauty care was responsible for $466 million of net income, growing faster than any other segment of P&G’s business.
P&G attributed the increases to “volume, savings from the restructuring program and Clairol integration and lower material costs.” Singled out for their solid volume growth were Pantene, Pert, Herbal Essences and Head & Shoulders Ultimate Clean. Hair care business was said to be particularly strong in Asia.
For the full year, P&G’s net income rose 19.2 percent to $5.19 billion, or $3.69 a diluted share, from $4.35 billion, or $3.09. Sales advanced 7.8 percent to $43.38 billion from $40.24 billion.
Beauty’s contribution to net income was $1.98 billion, 23 percent higher than in fiscal 2002. Sales rose 14 percent to $12.22 billion, with benefits from currency exchange more than offsetting downward pressure on prices.