01.27.11
The Procter & Gamble Company’s second quarter net sales increased 2% to $21.3 billion driven by six percent volume growth, which was partially offset by unfavorable foreign exchange and mix impacts. Organic sales grew three percent, the company said.
Diluted net earnings from continuing operations of $1.11 per share, an increase of 10%. Core EPS was up three percent.
The company continued to deliver broad-based volume and market share growth. Volume was up 6% behind growth in all major geographic regions, 16 of 17 top countries, five of six business segments and 19 of 23 billion-dollar brands. Market share was up in all geographic regions and the majority of key countries and brands. Businesses representing about 60 percent of net sales maintained or grew market share.
"We are expanding market shares by touching and improving the lives of more consumers in more parts of the world, more completely through our innovation and expansion plans," said Chairman of the board, president and CEO Bob McDonald. "This is driving strong volume and sales growth ahead of market levels. Core EPS is ahead of year-ago levels, and we are on track to deliver seven to nine percent growth for the year."
Net sales increased 1% to $5.3 billion in the company’s beauty segment, and organic sales grew 3%. Volume grew 5%, while organic volume, which excludes the net impact of acquisitions and divestitures, increased 6%. Volume growth was driven entirely by double-digit growth in developing regions, the company said. Lower pricing and unfavorable foreign exchange each reduced net sales by one percent. Mix reduced net sales by two percent due to disproportionate growth in developing regions and retail hair care, both of which have lower than segment average selling prices.
Volume in retail hair care grew high single digits behind double-digit growth in developing regions primarily due to initiative activity, value adjustments and distribution expansions in Asia and Latin America.
Volume in female beauty was up mid-single digits mainly due to skin care initiatives and market growth in Asia and the continued success of female blades and razors initiatives in North America and Western Europe. Volume in salon professional declined double digits due to the exit of non-strategic businesses and lower shipments in developed markets.
Volume in prestige products was down low single digits due to the divestiture of minor brands, while organic volume was up low single digits behind market growth in Asia and the continued success of new fragrances launched in the prior quarter. Net earnings increased two percent to $896 million driven by higher net sales and a lower effective tax rate, partially offset by lower operating margin. Operating margin contracted mainly due to increased marketing spending and higher commodity costs, mostly offset by lower foreign currency exchange costs and reduced overhead spending.
Grooming net sales increased 3% to $2.2 billion on a 5% increase in unit volume. Organic sales were up six percent. Price increases, taken primarily across blades and razors, added one percent to net sales growth. Unfavorable foreign exchange reduced net sales growth by three percent.
Volume growth was led by high single-digit growth in developing regions, while developed regions delivered low single-digit growth. Volume in male grooming increased mid-single digits primarily due to growth of blades and razors in developing regions and deodorants in North America. Net earnings increased 11% to $482 million driven primarily by net sales growth and a lower effective tax rate. Operating margin increased slightly as lower foreign currency exchange costs, manufacturing cost savings and positive product mix were mostly offset by higher marketing spending.
The Health Care unit, which includes oral care products like Crest, reported a 2% gain in net sales to $3.1 billion on unit volume growth of 5%. Organic sales grew 5%, the company said. Unfavorable foreign exchange reduced net sales by three percent. Volume was up high single digits in developing regions and mid-single digits in developed regions. Volume growth was led by oral care which was up high single digits due primarily to the continued success and incremental merchandising support behind Crest 3D White in North America, Oral-B toothpaste expansions in Brazil, Belgium and Holland and the Pro-Health innovation in multiple markets around the world.
On the household side, fabric care and home care net sales were in line with the prior year period at $6.3 billion. Organic sales increased 2%. Volume grew 7%, with all regions contributing to growth. Organic volume, which excludes the impact of the Ambi Pur acquisition, was up 5%. Pricing reduced net sales by 1%, the company said. Mix lowered net sales by 3% primarily due to disproportionate growth of mid-tier product lines, which have lower than segment average selling prices. Unfavorable foreign exchange reduced net sales by 3%. Volume increased double digits in developing regions and mid-single digits in developed regions.
Diluted net earnings from continuing operations of $1.11 per share, an increase of 10%. Core EPS was up three percent.
The company continued to deliver broad-based volume and market share growth. Volume was up 6% behind growth in all major geographic regions, 16 of 17 top countries, five of six business segments and 19 of 23 billion-dollar brands. Market share was up in all geographic regions and the majority of key countries and brands. Businesses representing about 60 percent of net sales maintained or grew market share.
"We are expanding market shares by touching and improving the lives of more consumers in more parts of the world, more completely through our innovation and expansion plans," said Chairman of the board, president and CEO Bob McDonald. "This is driving strong volume and sales growth ahead of market levels. Core EPS is ahead of year-ago levels, and we are on track to deliver seven to nine percent growth for the year."
Net sales increased 1% to $5.3 billion in the company’s beauty segment, and organic sales grew 3%. Volume grew 5%, while organic volume, which excludes the net impact of acquisitions and divestitures, increased 6%. Volume growth was driven entirely by double-digit growth in developing regions, the company said. Lower pricing and unfavorable foreign exchange each reduced net sales by one percent. Mix reduced net sales by two percent due to disproportionate growth in developing regions and retail hair care, both of which have lower than segment average selling prices.
Volume in retail hair care grew high single digits behind double-digit growth in developing regions primarily due to initiative activity, value adjustments and distribution expansions in Asia and Latin America.
Volume in female beauty was up mid-single digits mainly due to skin care initiatives and market growth in Asia and the continued success of female blades and razors initiatives in North America and Western Europe. Volume in salon professional declined double digits due to the exit of non-strategic businesses and lower shipments in developed markets.
Volume in prestige products was down low single digits due to the divestiture of minor brands, while organic volume was up low single digits behind market growth in Asia and the continued success of new fragrances launched in the prior quarter. Net earnings increased two percent to $896 million driven by higher net sales and a lower effective tax rate, partially offset by lower operating margin. Operating margin contracted mainly due to increased marketing spending and higher commodity costs, mostly offset by lower foreign currency exchange costs and reduced overhead spending.
Grooming net sales increased 3% to $2.2 billion on a 5% increase in unit volume. Organic sales were up six percent. Price increases, taken primarily across blades and razors, added one percent to net sales growth. Unfavorable foreign exchange reduced net sales growth by three percent.
Volume growth was led by high single-digit growth in developing regions, while developed regions delivered low single-digit growth. Volume in male grooming increased mid-single digits primarily due to growth of blades and razors in developing regions and deodorants in North America. Net earnings increased 11% to $482 million driven primarily by net sales growth and a lower effective tax rate. Operating margin increased slightly as lower foreign currency exchange costs, manufacturing cost savings and positive product mix were mostly offset by higher marketing spending.
The Health Care unit, which includes oral care products like Crest, reported a 2% gain in net sales to $3.1 billion on unit volume growth of 5%. Organic sales grew 5%, the company said. Unfavorable foreign exchange reduced net sales by three percent. Volume was up high single digits in developing regions and mid-single digits in developed regions. Volume growth was led by oral care which was up high single digits due primarily to the continued success and incremental merchandising support behind Crest 3D White in North America, Oral-B toothpaste expansions in Brazil, Belgium and Holland and the Pro-Health innovation in multiple markets around the world.
On the household side, fabric care and home care net sales were in line with the prior year period at $6.3 billion. Organic sales increased 2%. Volume grew 7%, with all regions contributing to growth. Organic volume, which excludes the impact of the Ambi Pur acquisition, was up 5%. Pricing reduced net sales by 1%, the company said. Mix lowered net sales by 3% primarily due to disproportionate growth of mid-tier product lines, which have lower than segment average selling prices. Unfavorable foreign exchange reduced net sales by 3%. Volume increased double digits in developing regions and mid-single digits in developed regions.
Fabric care volume was up mid-single digits mainly due to share growth behind initiative activity and market growth in developing regions. Home care volume increased double digits driven mainly by initiative activity, increased marketing spending and the Ambi Pur acquisition.
Net earnings for fabric care and home care declined 21% to $758 million mainly due to operating margin contraction. Operating margin declined primarily due to unfavorable product mix, higher commodity costs and increased marketing spending, partially offset by manufacturing cost savings.