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Coronavirus Impact: Consumer Stockpiling Continues, According to P&G

"We haven't really seen a retreat from the stock up that occurred."

Consumers are still buying more basic household items due to the coronavirus pandemic, according to Procter & Gamble chief operating officer and chief financial officer Jon Moeller.

The company has seen increased consumer demand for health, hygiene and home cleaning products that boosted sales for the fiscal year and latest quarter.

“We’re seeing two things in terms of purchase and consumption. The first is wanting to have a larger inventory at home, not wanting to run out, not wanting to go to the store as frequently,” Moeller told journalists on a call Thursday. “We haven’t really seen a retreat from the stock up that occurred. Consumers generally are carrying higher inventory levels. They are also consuming more — this isn’t just an inventory dynamic, there’s a clear consumption trend.”

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Moeller gave fabric care as an example, noting that during the pandemic, people are more frequently washing their clothes after just one wear. Paper towels, too, have seen a 20 percent jump in sales in the U.S., he said.

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Those trends caused jumps in P&G’s business for the fourth fiscal quarter.

For the quarter, net sales gained 4 percent, to $17.7 billion. Diluted net earnings per share were $1.07, a drastic increase due to an impairment charge from the Gillette shave-care business the previous year.

While most of P&G’s business segments fared well, beauty did not — sales were flat in the quarter, at $3.1 billion, due to pandemic-related disruptions in beauty shopping, especially for SK-II in the travel retail channel.

Grooming sales were down 5 percent in the latest quarter, to $1.5 billion, despite Moeller’s assertion that face masks fit better without facial hair getting in the way.

Things in personal care were brighter for the full year.

The company posted a net sales gain of 5 percent, to $71 billion, for the year, with diluted net earnings per share of $4.96. Beauty net sales were up 4 percent, to $13.4 billion, and grooming sales were down 2 percent, to $6 billion.

For the year, P&G’s e-commerce sales were up 40 percent and now make up about 10 percent of total company sales, about $7 billion.

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