SK-II Olympics

Procter & Gamble Co.’s sales jumped 5 percent in the third fiscal quarter due to consumers stocking up on home and health supplies during the coronavirus pandemic.

The company posted $17.2 billion in net sales for the quarter, with almost $3 billion in net earnings. Diluted net earnings per share were $1.12, up 8 percent from the prior-year period.

“The strong results we delivered this quarter are a direct reflection of the integral role our products play in meeting the daily health, hygiene and cleaning needs of consumers around the world,” P&G chief executive officer David Taylor said in a statement.

Chief financial officer Jon Moeller said U.S. “pantry loading” contributed to gains in the region, which was up 10 percent in the quarter, and more than made up for declines in China. Moeller said he expects the COVID-19 pandemic may change the way consumers live their lives, potentially leading to a “forever altered” approach to health and hygiene. Examples included more single-use products versus mops or sponges, and washing clothes after just one wear.

At the same time as P&G navigates the business through the COVID-19 pandemic, the company has ramped up production for things like face masks. “We expect to be producing more than 10 million masks per month,” Moeller told journalists on a Friday morning call. Right now, the business has mask manufacturing in China and the U.S., and is able to produce about 40 percent of the mask goal, he said.

In the quarter, beauty sales dipped in the quarter, down 1 percent, while grooming sales fell 3 percent. P&G’s health-care unit posted a 7 percent gain, while fabric and home care posted an 8 percent jump, and baby, feminine and family care rose 6 percent in the quarter. P&G’s online business grew by 35 percent in the quarter, and now makes up about 10 percent of the global business.

Beauty’s decline was impacted by the double-digit slip of SK-II, which before had been growing for several consecutive years. The drop was due to the disruption of retail markets in Asia and a sharp reduction in travel retail sales, both driven by COVID-19. “Our large SK-II skin are business, which is centered in Asia, that declined over 20 percent,” Moeller said. Analysts have estimated SK-II is around a $3 billion business.

In grooming, shave care sales fell due to a “disproportionate decline in North America.” Moeller noted that “shave frequency is not as high,” as it was before COVID-19 now, which perhaps people have noticed via colleagues on video conferences. But he also said that health care workers have been advised to shave in order to have masks fitting as close to their faces as possible, and that P&G is donating razors.

P&G adjusted its guidance for fiscal 2020 downward — projecting a 3 to 4 percent gain in sales.

Asked by Wall Street analysts about a recession, Moeller said he assumed “it’s already here, and will be here for some time.”

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