SK-II continues to drive P&G sales.
The luxury skin-care brand was called out in the company’s third-quarter earnings statement for its “disproportionate growth.” Broadly in P&G beauty, net sales were up 4 percent to nearly $3.1 billion, driven by high-end innovation, increased pricing and SK-II. Hair was up mid-single digits with organic growth in developing and developed countries, plus increased pricing.
Grooming, on the other hand, has continued to struggle, and posted a net sales dip of 8 percent in the quarter with $1.4 billion in sales. “The benefit of devaluation-driven price increases were offset by unit volume declines,” P&G said in its earnings release. Organic sales of appliances were down in the mid-single digits as shoppers went for mid-range products.
Overall, P&G posted $16.5 billion in net sales for the third fiscal quarter, up 1 percent versus the prior year. Organic sales were up 5 percent, driven by an increase in shipment volume and pricing. Net earnings were $2.78 billion, and diluted net earnings per share were $1.04, a 9 percent increase from the prior-year period.
P&G is forecasting 1 percent sales growth for fiscal 2019, which includes the negative impact of foreign exchange and positive impact from acquisitions and divestitures.
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P&G sold most of its sluggish beauty portfolio to Coty Inc. in 2016, and in the past year has started to build out that segment again via acquisition. This time, the business has focused on capabilities, buying direct-selling natural personal-care brand Native, adding specialty beauty expert First Aid Beauty, natural skin-care brand Snowberry, and multicultural brands Bevel and Form.