Slow Going for P&G?

P&G posted 2% sales growth to $20.2 billion for the January–March quarter. Most categories showed an average increase of 1-2%.

However, not all news was bleak for the global personal care powerhouse. The company announced the addition of two brands, SK-II and Vicks, to the elite group of billion-dollar brands, which represents brands with annual net sales of at least one billion dollars.

For the quarter, beauty net sales increased 1% to $4.8 billion. Volume in hair care increased low single digits behind high-single-digit growth in developing regions due to product innovation activity and distribution expansions in Asia, which more than offset a mid-single digit decline in developed markets. Volume in skin care, personal care and cosmetics decreased low single digits primarily due to heightened competitive activity in North America. Volume in prestige products increased mid-single digits, with organic volume increasing high single digits driven by initiatives on SK-II and fragrances.

Grooming net sales were in line with the prior year period at $2.0 billion. Shave care volume grew low single digits driven by mid-single-digit growth in developing regions behind product and commercial innovation, Fusion ProGlide geographic expansion and market growth.

Health care net sales increased 2% to $3.0 billion. Oral care volume decreased low single digits reflecting competitive promotional activity, which was partially offset by innovation and geographic expansion.

Fabric care and home care net sales increased one percent to $6.6 billion. Fabric care volume decreased low single digits as growth in developing regions, driven by new innovation and market growth, was more than offset by a decrease in developed regions due to consumer value issues following price increases taken in previous periods. Home care volume decreased low single digits driven by a mid-single digit decrease in developed markets due to the impact of price increases, partially offset by a double digit increase in developing markets driven by innovation and distribution expansion.

Baby care and family care net sales increased five percent to $4.2 billion

For the April–June 2012 quarter, net sales growth is estimated to be up 1-2%, according to the company. Net sales are expected to increase 4%in fiscal 2012.

“We delivered broad-based organic sales growth, with all of our business segments growing, in a difficult macroeconomic and competitive environment,” said Chairman of the Board, President and Chief Executive Officer Bob McDonald. “We are making good progress against our productivity and cost savings program and improving core operating profit growth as we continue to execute our innovation and portfolio expansion plans. Looking ahead, we expect further acceleration in core operating profit growth in the fourth quarter driven by top-line growth, more favorable cost comparisons and productivity improvements.”