PG Reports 9 Sales Gain In Fiscal First Quarter 2011

P&G Reports 9% Sales Gain In Fiscal First Quarter 2011

The Procter & Gamble Company announced that it has delivered strong fiscal first quarter net sales growth of 9% to $21.9 billion. According to the company, organic sales grew 4% behind higher volume and pricing.

“The first quarter was a good start to the fiscal year,” said chairman, president and CEO Bob McDonald. “We maintained strong top-line growth momentum in a difficult operating environment. We are well positioned—due to continued top-line strength, recently implemented price increases and our productivity improvement and cost savings efforts—to improve earnings growth as we progress through the fiscal year.”

Beauty net sales increased 9% to $5.4 billion on unit volume growth of 4%, the company said. Organic sales grew 4%, the ninth consecutive quarter of growth, on 5% organic volume growth. Price increases added 2% to net sales growth. Net earnings declined 12% to $731 million as lower operating margin more than offset the impact of sales growth. Operating margin declined due to a commodity cost driven reduction in gross margin and increased marketing and research and development investments, the company said.

Grooming net sales increased 10% to $2.1 billion. Unit volume was in line with prior year. Organic sales were up 3%. Price increases added 2% to net sales growth. Volume grew low single digits in developing regions and decreased low single digits in developed regions. Male grooming volume grew low single digits behind growth of blades and razors in Asia and Latin America, as well as growth behind male personal care products in North America, partially offset by a decrease in blades and razors in Western Europe due to market softness. Appliance volume decreased high single digits due to market contraction in Western Europe and a strong base period for shavers, epilators and hair care appliances. Net earnings increased 10% to $438 million, in line with net sales growth.

Fabric care and home care net sales increased 6% to $6.7 billion. Unit volume decreased 1%, and organic sales increased 1%. Net earnings declined 14% to $805 million, as sales growth was more than offset by operating margin contraction. Operating margin declined primarily due to lower gross margin, as higher commodity costs were only partially offset by price increases and manufacturing cost savings, the company said.


Double Digit Growth At Estée Lauder
The Estée Lauder Companies Inc. reported “outstanding” financial performance for its first quarter ended Sept. 30, 2011, according to the company. Net sales increased 18% to $2.48 billion, while net earnings jumped 46% to $278.6 million.

According to Fabrizio Freda, president and chief executive officer, company performance was broad based, highlighted by healthy top line growth across all categories and regions, strong bottom line growth and continued margin expansion.

“These results reflect the strength of our brands, the appeal of our superior product innovations and the effectiveness of our focused advertising and marketing spending,” said Freda. “The recent economic uncertainty and financial market volatility have not significantly impacted our business. The strength of our underlying fundamentals, our winning strategy and the increasing efficiency of our business model enabled us to significantly outperform the beauty industry and continue to report exceptional results.”

The company’s strong performance was due to solid overall business, particularly from its largest brands, helped by a weaker US dollar. It grew double-digits in every region, including the US, its home market. Sales also increased in virtually all product categories within each region. Sales growth was particularly strong in travel retail and emerging markets, along with solid gains in many developed countries.

The skin care category gained share during the quarter. The Estée Lauder brand had strong sales from the recent launches of Idealist Even Skintone Illuminator and Idealist Cooling Eye Illuminator. The launch of the reformulated Nutritious Vita-Mineral and Resilience Lift lines of products also contributed incremental sales. In Clinique, the successful recent launch of Turnaround Overnight Radiance Moisturizer, as well as higher sales of Repairwear Laser Focus Wrinkle & UV Damage Corrector, contributed to the category’s growth. La Mer generated strong sales growth for the quarter, reflecting the continued success of The Radiant Serum, while the Plantscription line of products by Origins also contributed incremental sales.

Makeup net sales growth reflected strong increases, primarily from the company’s makeup artist brands and certain heritage brands. The higher makeup sales reflected increases across a broad range of products, such as the recent launches of new Pure Color eye and lip products and Doublewear Stay-In-Place Makeup SPF 10 from Estée Lauder. Repairwear Laser Focus Makeup and Lid Smoothie Antioxidant 8-Hour Eye Colour from Clinique generated solid sales gains.

Incremental fragrance sales were generated from the recent launches of DKNY Golden Delicious, Estée Lauder Sensuous Nude and Coach Poppy Flower. Higher fragrance sales from the Tom Ford and Jo Malone luxury brands, contributed to the category’s growth. Partially offsetting these increases were lower sales of Estée Lauder pleasures bloom, pureDKNY and Coach Poppy.

Hair care net sales increased, reflecting an improved retail environment. The increase was primarily due to higher sales from Aveda, which included the recent launch of Be Curly Style-Prep. Bumble and bumble also posted sales growth, reflecting the launch of the Sleek & Straight line of products.

Net sales growth in the region was primarily attributable to higher sales in the US, which benefited from a solid retail environment in the prestige area and winning new product offerings from the company. The improvement reflects strong growth from the company’s heritage brands and makeup artist brands. Sales also increased in Canada. The higher sales also reflect strong double-digit gains in Latin America, which benefited from growth in emerging markets, such as Brazil.

Double-digit net sales growth was also recorded in a number of other countries, led by the United Kingdom, the Middle East, Germany, France and Italy. The company also generated solid local currency sales growth in this region, with all countries posting increases, except Japan and Australia. The strongest gains were generated in China, Hong Kong, Korea, Taiwan and Thailand, primarily reflecting strong sales of skin care and makeup products.

For the full year, net sales are forecasted to grow between 8% and 10% at Estée Lauder.


Business Moves Prove Smart at Colgate
Colgate-Palmolive Company reported worldwide net sales increased 11% to $4.4 billion in third quarter 2011. Operating profit increased 8% to $1.0 billion, while net income rose 4% to $643 million.

Global unit volume grew 4.5%, pricing increased 2.0% and foreign exchanges was positive 4.5%. According to the company, the Sanex acquisition contributed 2.0% to sales and volume growth.

As previously announced, consistent with the company’s focused business strategy, it sold its laundry detergent brands in Colombia during third quarter 2011, resulting in an aftertax gain of $135 million.

Ian Cook, chairman, president and chief executive officer, commented on the results. “We are pleased with our strong top and bottom line growth this quarter with worldwide net sales, operating profit, net income and diluted earnings per share all increasing versus year ago, despite very sharp increases in material costs, an intense competitive environment and challenging macroeconomic conditions worldwide.”

According to Cook, Colgate’s global market shares in toothpaste and manual toothbrushes are both at record highs year to date.

“As we look ahead to 2012, while our global budget process is still in its initial stages and macroeconomic and foreign exchange volatility remain a challenge, we are planning to improve our worldwide market shares and volume growth with advertising support behind many new and existing Colgate products. Consistent with our long-term strategy, our goal is to return to double-digit earnings per share growth in 2012,” he said.


Turmoil Engulfs Avon
While controversy swirls around the company regarding allegations that it broke international bribery laws and fair disclosure in the US, Avon Products, Inc. reported third-quarter 2011 total revenue rose 6% to $2.8 billion. Beauty sales increased 8%, with gains in all categories; fragrance, color, personal care and skin care grew 12%, 9%, 6%, and 2%, respectively. Active representatives were flat in the quarter.

By region, third quarter revenue in North America was down 7%. Active representatives were down 9% and units sold declined 8% compared with a year ago, according to the company.

In Central & Eastern Europe, third-quarter revenue was up 7%. Benefits from improving trends in active representative growth were offset by weaker average order partly due to the increasingly challenging macroeconomic backdrop in the region. Russia’s sales rose 4%, according to the company. Western Europe, Middle East & Africa’s third-quarter revenue increased 9%, with a significant benefit from a Value Added Tax (VAT) settlement in the UK. Turkey declined 6%, while South Africa rose 29%. Asia Pacific’s third-quarter revenue was up 1%. Revenue in the Philippines increased 2%, while China declined 6%.

Latin America’s third-quarter 2011 revenue was up 11%, as the region’s results were pressured by disruptions in Brazil associated with the Enterprise Resource Planning (ERP) implementation. Strong growth continued in other large markets within Latin America. Mexico was up 17%, driven by balanced growth in active representatives. Venezuela was up 22%.


Q1 Sales Rise 6.6% At Elizabeth Arden
Elizabeth Arden, Inc. posted an upswing in its financial results for its first fiscal quarter ended Sept. 30, 2011, as net sales rose 6.6% to $303.5 million. According to the company, net sales of its international business increased by 16.6%, driven by growth in the travel retail and distributor markets and in Asia. Net sales in North America grew by 1.6% and were balanced across the prestige and mass businesses.

CEO Scott Beattie commented, “We had another quarter of strong growth for the Elizabeth Arden brand and are progressing with our re-branding initiative.”

Global sales of Elizabeth Arden branded products grew by 14% this quarter with sales of the skin care and color cosmetic portfolio increasing by 22%. Sales of Britney Spears and Elizabeth Taylor fragrances also rose by 14% and 16%, respectively.

For the second quarter of fiscal 2012, the company is introducing guidance for net sales of $424 million to $434 million, or an increase of 4.5-7.0%.