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Procter Gambles Net Income Soars in Q4



Published August 31, 2012
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Procter & Gamble’s Net Income Soars in Q4

• Procter & Gamble Co. reported fourth quarter net income far above Wall Street’s expectations. Net income jumped 74% to $3.63 billion, as revenue fell 1.2% to $20.2 billion.

“We enter fiscal 2013 with very strong developing market momentum, strengthened plans on our core developed market business, and with the benefit of a $10 billion cost savings program, which is well underway,” said chairman, president and CEO Bob McDonald. “Despite a difficult macro environment, we see significant opportunities for top- and bottom-line growth.”

For the year, net sales increased 3% to $83.7 billion. Unit volume was flat. Organic sales grew 3%. Price increases across all segments improved net sales by 4%, partially offset by unfavorable geographic and product mix, which reduced net sales by 1%. Diluted net earnings per share fell 7% to $3.66 a share.

Colgate Q2 Sales Rise 2%
• Colgate-Palmolive Company’s second quarter sales rose 2% to more than $4.2 billion. Unit volume grew 5.0%, pricing increased 3.5% and foreign exchange was negative 6.5%. Excluding divested businesses, global unit volume grew 5.5%. The Sanex acquisition contributed 1.0% to sales and volume growth. Organic sales grew 8.0%. Net income rose less than 1% to $627 million. Gross profit margin was 57.7% in second quarter 2012, an increase of 30 basis points, according to the company.

“We are very pleased that our top and bottom line growth momentum continued this quarter, with net sales, gross profit, operating profit, net income and diluted earnings per share all increasing versus year ago,” said Ian Cook, chairman, president and chief executive officer. “The excellent 8.0% organic sales growth, which was the largest increase we have seen in eight quarters, was driven by unit volume gains and higher pricing on a worldwide basis. The robust growth was led by the emerging markets where organic sales grew 13.0% in the quarter, and we are encouraged by the 2.5% organic sales growth in the developed markets.”

Colgate’s global market shares in toothpaste and manual toothbrushes are both at record highs year to date. Colgate’s share of the global toothpaste market strengthened to 45.0% year to date, up 0.6 share points versus a year ago. The company’s global leadership in manual toothbrushes also strengthened during the quarter with Colgate’s global market share in that category reaching 32.8% year to date, up 0.6 share points versus year ago.

In North America (18% of company sales), net sales increased 2.0% in second quarter 2012. Unit volume decreased 0.5% with 3.0% higher pricing and 0.5% negative foreign exchange. Organic sales increased 2.5% during the quarter.

In the US, new product launches including Colgate Optic White and Colgate Sensitive Pro-Relief toothpastes are strengthening the firm’s leadership in toothpaste, with its share of that market reaching 36.6% year to date, up 1.5 share points versus year ago. In manual toothbrushes, Colgate achieved brand market leadership year to date, driven by the success of Colgate 360° Optic White, Colgate 360° Sensitive Pro-Relief, Colgate 360° Total Advanced and Colgate Extra Clean manual toothbrushes.
Successful new products in the US in other categories include Softsoap brand Pampered Hands Jasmine Oasis foaming hand soap, Softsoap brand Vineyard Escape Scrub, Irish Spring Deep Action Scrub and Irish Spring Clear & Fresh Skin body washes, Palmolive Soft Touch with Vitamin E and Palmolive Fresh Sponge dish liquids, Tom’s of Maine Naturally Dry antiperspirant, Speed Stick Power antiperspirants/deodorants and Fabuloso Sunset Spice liquid cleaner.

“Looking ahead, we continue to be sharply focused on our aggressive funding-the-growth programs and our strategic worldwide pricing initiatives,” said Cook. “We anticipate that the combined benefits from those programs will help us offset the transaction impact of negative foreign exchange and achieve gross margin expansion in 2012, allowing for even higher levels of advertising support behind a full pipeline of new products planned for launch in the balance of the year.”

Q2 Sales Jump 20% At Inter Parfums
• Inter Parfums’ second quarter sales rose 20% to $145.6 million. European sales rose 18% to $125.6 million and US sales rose 37% to $20 million. For the six months, sales rose 22% to nearly $311 million. US sales were up 19% to $228.1 million and European sales increased 52% to $26.3 million.

According to Jean Madar, chairman and CEO of Inter Parfums, European results were bolstered by strong performances across the brand portfolio. Compared to the same periods in 2011, Burberry’s sales rose 34% for the current second quarter and 21% for the first half on strong growth of established fragrances, including Burberry Body, which launched in late 2011. While there were no major launches this year, Lanvin fragrance sales increased 13% for the quarter and year-to-date due to continuing gains by Eclat d’Arpège and the steady performances by Jeanne Lanvin and Marry Me! With Montblanc Legend as the catalyst, Montblanc brand sales rose 72% in the second quarter and 75% through the first half, according to the company.

“We are likewise delighted by the momentum of Jimmy Choo fragrances that began in 2011 with the eau de parfum, and continued in 2012 with the eau de toilette, resulting in a 13% and 42% increase in brand sales for the second quarter and first half, respectively,” said Madar. “Some of the smaller brands in our portfolio are also generating significant year-to-date gains, including Boucheron, which had a more than fivefold increase in sales, and S.T. Dupont with a 48% sales increase compared to the first half of 2011.”

Madar also noted that top line growth was especially strong in North America, the Middle East, Asia, and South America, where year-to-date sales rose 56%, 40%, 22%, and 35%, respectively. Inter Parfums posted significant sales growth in Eastern Europe with first half gains of 25%. Despite the slowdown in consumer spending in selected countries in Western Europe, first half sales were 10% ahead of the same period last year.

On the subject of US-based operations, Madar said, “As was the case in the first quarter, second quarter sales benefited from the inclusion of Anna Sui fragrance sales and the launch of our first Nine West fragrance, Love Fury. Additionally we brought a number of new products to market during the quarter including: Miss Madison by Brooks Brothers, Wishes & Dreams for bebe, and a new men’s scent, Wildbloom Blue for Banana Republic. Finally, international distribution of the US specialty retail brands in our portfolio has been an ongoing success and a contributor to our top line growth.”

Sally Beauty’s Third Quarter Sales Rise 6%
• Sally Beauty Holdings’ consolidated net sales rose 6% to $887.0 million for the quarter ended June 30, 2012. The beauty products retailer attributed the gain primarily to same store sales growth, the addition of new stores and acquisitions.

For the third quarter ended June 30, 2012, Sally Beauty Supply’s sales increased 7% to $553.4 million; while its Beauty Systems Group showed gains of 4.4% to $333.6 million. Sales growth for the Beauty Systems Group was primarily driven by growth in same store sales and new store openings, according to the company.

Ellman Technologies Picks Up Sandstone
• Ellman Technologies has acquired the assets of Sandstone Medical Technologies, LLC, a leader in the aesthetic laser and IPL technology field. The transaction significantly enhances Ellman’s presence in the aesthetic market with laser and intense pulsed light (IPL) technologies and merges Sandstone’s line of affordable laser systems with Ellman’s aesthetic and surgical RF product portfolio, the firm said. The financial terms of the deal were not disclosed.

“Sandstone is an ideal fit to further the growth of our franchise. We have complementary businesses that focus on delivering physicians high quality, value based products and we believe we are well positioned to capitalize on this $1.8 billion and growing global market opportunity,” commented Frank D’Amelio, CEO of Ellman International.

He continued, “We have experienced double digit growth over the past several years due to the success of both Pellevé and our RF surgical generators. We expect this acquisition to accelerate our growth and penetration of the aesthetic market.”

Swander Pace To AcquirePhysicians Formula
• Physicians Formula Holdings, Inc. and Swander Pace Capital have entered into a definitive merger agreement under which affiliates of Swander Pace will acquire Physicians Formula, the maker of a range of skin care products.

Under the terms of the merger agreement, Swander Pace, through its affiliates, will acquire all outstanding shares of the common stock of Physicians Formula for $4.25 per share in cash, or approximately $65 million. The per share price represents a premium of approximately 15% over Physicians Formula’s closing stock price on Aug. 14, 2012 and a 21% premium to the company’s one-month volume-weighted average price of $3.50 per share.

The Physicians Formula board of directors, acting upon the unanimous recommendation of its special committee composed solely of independent directors, unanimously approved the merger agreement and resolved to recommend that the company’s stockholders vote to adopt the merger agreement.
Upon close of the merger, Physicians Formula will be privately owned and will continue to be operated by the company’s current management team and employees.

Physicians Formula, founded in 1937 by Dr. Frank Crandall and known as a “masstige brand” of prestige-style products sold in the mass market, will remain based in Azusa, CA.

“Our board of directors, following a thorough analysis by its special committee, has determined that this transaction offers the best value for our stockholders,” said Ingrid Jackel, Physicians Formula chairwoman and chief executive officer.

“We are pleased that Swander Pace has agreed to purchase our company. The firm has a record of success in acquiring and operating companies in the consumer space, and we believe they will add value to our business as we continue to successfully execute our growth initiatives,” Jackel continued.
The transaction, subject to closing conditions including receipt of Physicians Formula stockholder approval, is expected to close later this year.

Sales Jump 14% in Q2 at CCA
• CCA Industries’ sales increased 14.2% to $14.7 million in the second quarter ended May 31, 2012. The company reported net income of $302,100, compared to a loss of $247,268 a year ago. For the six months, sales increased 11.6% to nearly $28.4 million and net income quadrupled to $389,634.

“We are pleased to be reporting higher total revenues and net income for the first six months of fiscal 2012,” said Dunnan D. Edell, the company’s president and chief executive officer. “CCA’s financial position remains sound with no bank debt and the company presently has little international distribution in Europe, thus no financial exposure in that troubled marketplace,” added Edell.


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