P&G earnings shaved as beard craze hits grooming

NEW YORK (AFP) – Procter & Gamble reported a drop in quarterly earnings yesterday following a mixed sales performance in its consumer products portfolio, with the shaving business continuing to struggle.

P&G, whose products include Crest toothpaste and Tide detergent, said net income in its fiscal fourth-quarter was $1.9 billion, down 14.6 percent from the year-ago period.

Revenues rose 2.6 percent to $16.5 billion, slightly below analyst expectations.

P&G enjoyed higher organic sales – which exclude the effect of currency changes – in its beauty segment, thanks in part to a good performance of the SK-II skin product and a premium Oil of Olay product.

Organic sales were also higher in fabric and home care, and in health care.

But P&G encountered another quarter of sales slippage in grooming care, where its Gillette line has struggled from the rise of online competitors and as more men grow beards.

P&G enacted price cuts last year to try to raise US grooming sales, a move which has boosted volume and market share growth of its products in the region.

But P&G said those measures only go so far given fashion trends.

“What offsets that is the continual shift to less shaving,” said chief financial officer Jon Moeller in a briefing with reporters.

Excluding the effect of currency changes, sales in grooming fell three percent.

P&G said net income was also dented by restructuring costs and expenses connected to paying off debt early.

“We are operating in a very dynamic environment affecting the cost of operations and consumer demand in our categories and against highly capable competitors,” said chief executive David Taylor.

Read more...