April - June 2016 quarter net sales fell 3% to $16.1 billion. However, beauty segment organic sales grew 1% versus the prior year driven by pricing benefits and higher organic volume. Organic sales increased in skin and personal care driven by growth of the super-premium SK-II skin care brand, partially offset by lower sales of Olay. Hair care organic sales were unchanged as innovation-driven growth on Pantene and Head & Shoulders was offset by declines in other brands from competitive activity.
Grooming segment organic sales increased 7% driven by higher pricing and volume. Sales growth was strong in developing markets driven by Fusion FlexBall innovation expansion and higher pricing while in developed markets sales growth behind the Fusion ProShield launch was offset by competitive activity in North America. Organic sales increased on Braun behind innovation-driven volume increases. Health care segment organic sales increased 8%. Organic sales in oral care were up versus the prior year driven by increased marketing, strong innovation results and increased pricing.
Fabric & home care segment organic sales increased 1% due to an increase in organic volume. Fabric care organic sales were unchanged as increased organic volume from premium product innovation and increased marketing support was offset by pricing investments. Home care sales increased primarily due to strong innovation-driven growth in the dish care business. Baby, Feminine & Family Care segment organic sales increased 1% versus year ago. Baby Care and Feminine Care organic sales both increased behind innovation-driven volume growth. Family Care organic sales decreased as volume growth in the US was more than offset by pricing investments and a decline in Mexico from discontinuation of certain product lines.
Procter & Gamble Co. exceeded analyst expectations on revenue and profits in its fourth quarter, as it continued a 10-year cost cutting effort and improved revenue growth in key product categories.
P&G posted a $1.9 billion profit, or 79 cents per share, on net sales of $16.1 billion in its fiscal fourth quarter. Wall Street analysts were expecting net sales of $15.8 billion and earnings per share of 74 cents.
It also delivered some evidence that the massive reconfiguration of P&G – which included thousands of job cuts and the sale of more than 100 brands – is working as company leaders hoped. P&G posted increases in both organic sales, which exclude the impact of foreign exchange and divestitures, and sales volume, which measures the number of units sold.
P&G ended a two-year slump in organic sales growth last quarter, but the growth was driven by price increases – not increased consumption. This quarter, P&G posted volume increases in all product categories. P&G brands gained market share in Japan, Germany and the U.S., which remains P&G's largest market. In China, P&G reversed a three-quarter sales slump and is pursuing multiple strategies to capitalize on the country's growing middle class.
“The fourth quarter was another period of progress,” said Chairman, President and Chief Executive Officer David Taylor, in a press release. “We increased investments in innovation and advertising, funded by strong productivity improvement. Looking forward, we’re committed to continued productivity improvement and cost savings that provide the fuel for innovation and investments needed to accelerate and sustain faster top-line growth.”
For its fiscal 2017, P&G said it expects organic sales to climb about 2 percent.