P&G beauty care volume rises 4% in FY 1997 bolstered by hair care sales gains.
This article was originally published in The Rose Sheet
Executive Summary
PROCTER & GAMBLE BEAUTY CARE VOLUME GROWS 4% IN FY 1997 (ended June 30), boosted by a 3% hair care volume increase during the year that "continued to grow behind the strength" of Head & Shoulders and Pantene Pro-V, the company said. P&G noted the results do not include Pantene Pro-V hair sprays with Elastesse, which will debut in September. Hair care results were offset by a 3% volume decrease in the cosmetics and fragrances unit, which includes the Cover Girl and Old Spice brands
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PROCTER & GAMBLE BEAUTY CARE VOLUME GROWS 4% IN FY 1997 (ended June 30), boosted by a 3% hair care volume increase during the year that "continued to grow behind the strength" of Head & Shoulders and Pantene Pro-V, the company said. P&G noted the results do not include Pantene Pro-V hair sprays with Elastesse, which will debut in September. Hair care results were offset by a 3% volume decrease in the cosmetics and fragrances unit, which includes the Cover Girl and Old Spice brands. In the personal cleansing unit, which includes Oil of Olay, Ivory, Coast, Safeguard and Zest soaps, volume slipped 3% in the fiscal year. P&G said the personal cleansing segment was negatively affected by "strong competitive spending," noting that Unilever, the marketer of Lever soaps, was "particularly spending heavily" in response to the launch of P&G's Ivory Moisture Care bath bars and body washes. Moisture Care debuted in January with a $60 mil. ad/promo budget. P&G plans a much "stronger initiative program" for FY 1998, from which the company expects "volume growth to get back on the pace necessary to achieve...long-term objectives," P&G said. The program involves the introduction of new products, including the recently launched Pantene Pro V Elastesse, Oil of Olay Age Defying Series and Crest MultiCare toothpaste. Worldwide P&G sales edged up 1.4% to $35.76 bil. for the fiscal year, the company reported July 31. Operating income rose 14% to $5.49 bil. Through the 12 months, net earnings climbed 12.1% to $3.42 bil. To sustain the growth, P&G said it will continue to sell off non-strategic brands. The company's goal is to "build market share in a clear majority of [its] businesses on a global basis." P&G's North American business grew 2% to $17.7 bil. on 4% volume growth. For the fourth quarter, P&G beauty care volume was up 4%. Hair care sales also registered a 4% volume increase for the three months. Personal cleansing volume fell 5% in the period and cosmetics and fragrances decreased 7%. Within P&G's health care business, volume for oral care products declined 3% in the quarter. The company said it "expected soft results" in the segment as "competition heated up in the whitening segment." During the three-month period, Chesebrough-Pond's extended Mentadent with Advanced Whitening Formula and Rembrandt introduced Rembrandt Daily Whitening antibacterial gel. To counter the competition, P&G announced it has a "number of oral care initiates planned over the next 12 to 18 months" beyond the impending launch of Crest MultiCare, which began shipping to stores in July. Unilever posted a 1.4% consolidated sales increase to $13.74 bil. in the second quarter on constant exchange rates, the company reported Aug. 1. Operating profits climbed 31.5% to $1.38 bil. Excluding profit from the sale of Unilever's specialty chemicals business to Imperial Chemicals Industries, net profit rose 45% to $812 mil. For the half, net sales grew 3.1% to $26.17 bil., and net profit advanced 25% to $1.32 bil. Through six months, Unilever sales in North America "were ahead" of the first half of 1996, the company said. Helene Curtis sales "made a significant contribution to [Unilever's] overall performance," but were offset by the firm's prestige cosmetics business (including Elizabeth Arden and Calvin Klein), which registered "results behind the corresponding period last year." Advanced Polymer Systems revenues for its Microsponge delivery system technology more than doubled (up 118.7%) to $4.5 mil. from $2.1 mil. in the second quarter, the company reported July 31. Commenting on the results, APS pointed to the "successful launch" of J&J's Ortho Dermatologics Retin-A Micro (tretinoin gel microsphere 1%), which received FDA approval in February. The company also highlighted Avon's Anew Retinol Recovery Complex PM Treatment and Medicis' TxSystems Afirm retinol formulation as revenue contributors. APS consolidated revenues declined 16% to $4.5 mil. The company explained that revenues decreased after the sale of its $3.3 mil. personal care business, which it sold to the private label manufacturer Lander. Under the deal, APS divested its Exact acne treatment, Take Off makeup removers and Neet depilatory lines. The Microsponge technology is now APS' sole product offering. Total operating expenses decreased 30.6% to $2.9 mil. during the quarter, mostly attributable to a 37.3% decline in SG&A expenses to $2 mil., APS said. The company also reduced research and development expenditures 8.4% to $901,000. APS registered a net loss of $632,000, compared to a loss of $2.1 mil. in the prior-year period. SALES & EARNINGS REPORTED BY COMPANIES IN COSMETIC & RELATED FIELDS [Dollars in millions, except net-per-share] |