Health care continues to drive P&G’s sales growth

The CPG giant also incrementally increased marketing and promo spend amid supply chain related price hikes.


With organic sales growth of 7%, Procter & Gamble’s healthcare business unit is what’s driving the company’s latest topping of analyst estimates.

The unit, which includes brands like Oral-B, DayQuil, and Vicks is seeing strength. Looking just at North America, Personal Health Care organic sales grew grew mid-teens in Q3, including, the company says, a recovery of the respiratory business following a historically low cough-cold-flu season last year.

Overall, P&G is reporting that net sales rose 5% to $20.34 billion for the quarter ended Sept. 30, exceeding analyst expectations of $19.91 billion.

The company’s largest segment, fabric and home care – which includes brands like Tide and Febreze – reported organic sales growth of 5%, while the grooming business had organic sales growth of 4% during the quarter. And according to the company, Shave Care organic sales grew mid-single digits, with growth across all sub-segments including male, female and pre/post shave. P&G says female blades & razors grew double digits in every region thanks to premium innovation.

The company’s beauty and baby, feminine and family care units both saw organic revenue rise by only 2%. P&G reports that it saw more consumers buying its premium Pampers diapers and pants from the baby care segment, but that organic sales of Charmin toilet paper and Bounty paper towels fell as it spent more on promotions.

Andre Schulten, P&G’s CFO, said during a Tuesday morning conference call that promotional volume is up 30% (compared to 33% pre-pandemic), and expects it to remain at that level for some time as the market returns to normalcy. Overall marketing investment increased “in line with our all-in growth,” Schulten said, spending an additional $130 million dollars in Q3, after upping spending by $100 million in the same quarter last year. There is still significant opportunity to increase efficiency of its marketing spend, though, and the company is getting better at targeting and increasing quality of reach.

During the conference call, some analysts were worried about price increases being passed on to consumers, including those on Pampers and Always feminine hygiene products. The price hikes were done to offset recent increases in costs related to commodity and freight amid a global supply chain upheaval, with the company warning that inflation could continue throughout the year.

During the call, P&G CEO Jon Moeller says that while prices have risen, the company is in a position to minimize them through productivity and the growth of consumption compared to the last fiscal cycle. However, “none of that is a guarantee for the future,” Moeller warned, and says that supply chains continue to be hampered by volatility.