Procter & Gamble is reporting net sales moved up slightly, as the company says it is committed to brand communications.
The maker of Pampers, Tide, Olay, Vicks and Crest reported a fiscal third-quarter net income of $3.75 billion, marginally up from $3.4 billion a year earlier, however, volume declined for the second consecutive quarter. Net sales moved 1% higher to roughly $20 billion.
In Friday morning’s earnings call, Procter & Gamble chief financial officer Andre Schulten says the company is committed to an integrated strategy of a focused product portfolio of daily use categories where performance drives brand choice.
The CPG saw 3% organic sales growth in North America, with consumer demand remaining “very strong” in that market, Schulten says. He adds that there is no trade down of note to observe as private label share is holding steady.
Schulten says P&G is committing to brand communications for each price tier where it competes.
P&G remains confident the best path forward is to remain “fully invested” across its portfolio to create value and drive growth.
“We continue to invest in reach and frequency with strong quality of communications across the market,” Schulten says. The CPG is very diligent with ROI and post-event analysis, to fully understand if its ad spend investment is effective.
According to the company, a strong combination of great innovation with very sharp consumer insight translated into great copy, drives strong results. Skin and personal care brands like Old Spice and Secret, Schulten pointed out, have strong marketing communications and have seen business grow 11% in North America.
Home care is “expandable,” Schulten says adding that Febreze plug-in marketing investments have grown share for the brand in North America.
The environment to be “volatile and challenging” Schulten warns, but results year-to-date allows it to maintain or improve key guidance metrics of sales growth.
Despite the slumping volume, three of P&G’s divisions saw growth. Its beauty segment, which includes Olay and Pantene, saw volume increase 1%, fueled by innovations. Fabric and home care, including brands like Swiffer, saw a 1% volume growth increase. Its grooming business, which includes Gillette, saw volume move up 2%.
However, oral care organic sales were down in North America, and P&G’s health care and baby, feminine and family care divisions took a hit when it comes to sales volumes.
More premium offerings, such as Pampers’ Cruisers and Swaddlers, are growing share and sales in the United States. There is opportunity for mid-tier baby care, Schulten says.
