J&J Consumer Health On Solid Footing With Help From Personal Care Sales
This article was originally published in The Pink Sheet & The Rose Sheet
Analysts say firm’s consumer health division is showing signs of a comeback, with worldwide sales up 5.3% to $3.4bn, boosted 3.7% from currency exchange on strong beauty segment sales, driven by increased online marketing, and strengthening OTC drug sales.
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JP Morgan analysts had questions and J&J CEO Alex Gorsky and CFO Joseph Wolk had answers about liability suits alleging that use of the Johnson's brand talcum powder has caused mesothelioma or ovarian cancer. On the Johnson's brand outlook following its relaunch as a natural product line, Gorsky says sales were a key driver in the firm's consumer health sales in the 2018 third quarter. China, meanwhile, is a model for growing sales online, he says.
The mesothelioma liability case marks the first in New Jersey, the first involving a male plaintiff and the first to result in a plaintiff verdict. Punitive damages, potentially on top of the $37m in compensatory damages, have yet to be decided in the matter linking J&J’s talc to asbestos dangers.
When J&J CEO Gorsky says, "We're not just sitting back, we're making aggressive moves in areas such as e-commerce – investments in that shift," his words are music to analysts' ears. J&J has OTC drug and other consumer health brands to drive growth, but it's missing the digital piece, they say.