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P&G Posts Net Sales Gain, Earnings Dip

P&G's beauty numbers are up, but grooming still struggles.

Procter & Gamble posted a 3 percent net sales gain for the fiscal year, including strong growth in beauty.

The personal care and beauty giant reported $66.8 billion in net sales. Net earnings were $9.86 billion, down 36 percent. Diluted net earnings per share were $3.67, down 34 percent from the prior year due in part to the company’s divestiture of its beauty portfolio to Coty Inc.

Sales for the fiscal fourth quarter were up 3 percent to $16.5 billion. Net earnings were $1.89 billion, down 14 percent. Diluted net earnings per share were down 12 percent to 72 cents, which P&G said was because of non-core restructuring charges and early debt extinguishment costs.

Beauty sales were up 10 percent in the quarter, while grooming was down 1 percent. Beauty sales were driven by SK-II and Olay, and hair care posted mid-single digit organic sales growth “due to product innovation and improved retail execution,” the company said. While grooming sales declined, P&G chief financial officer Jon Moeller said on an early-morning call with press that the business was achieving volume growth and “making strong progress.”

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“What offsets that, to some extent, is the continued societal shift towards fewer shaves,” Moeller added.

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“We made important progress in fiscal 2018,” David Taylor, chairman, president and chief executive officer, said in a statement. “We are operating in a very dynamic environment affecting the cost of operations and consumer demand in our categories and against highly capable competitors. We will accelerate change in the organization and culture to meet these challenges. We will continue to drive cost and cash productivity improvements, and we will invest in the superiority of our products, packages and demand creation programs. All of these efforts are aimed at delivering balanced top-line and bottom-line growth that creates shareholder value over the short, mid and long term.”

For fiscal 2019, P&G is projecting organic sales growth between 2 and 3 percent, and core EPS growth of 3 to 8 percent.