Expanding market shares drive sales for P&G
CINCINNATI — Procter & Gamble announced on Thursday that second-quarter sales rose 2% as the company works to expand market shares in more parts of the world.
Net sales for the quarter rose 2% to $21.3 billion, driven by 6% volume growth, which was offset partially by unfavorable foreign exchange and mix impacts. Organic sales grew 3%.
Net earnings dropped 28% to $3.3 billion, or $1.11 per diluted share, compared with $4.7 billion, or $1.49 per diluted share, in the year-ago period. Net earnings from continuing operations totaled $1.11 per share, up 10%.
Core earnings per share rose 3% to $1.13 per share — 2 cents per share higher than the top end of the company’s guidance range. Core EPS is defined as diluted net earnings per share from continuing operations, excluding charges for pending European legal matters and the benefit of a significant adjustment to an income tax reserve, P&G said.
Volume rose 6% behind growth in all major geographic regions, 16-of-17 top countries, 5-of-6 business segments and 19-of-23 billion-dollar brands, P&G stated. Market share was up in all geographic regions and the majority of key countries and brands. Businesses representing about 60% of net sales maintained or grew market share.
"We are expanding market shares by touching and improving the lives of more consumers in more parts of the world, more completely through our innovation and expansion plans," stated chairman, president and CEO Bob McDonald. "This is driving strong volume and sales growth ahead of market levels. Core EPS is ahead of year-ago levels, and we are on track to deliver 7% to 9% growth for the year."
In beauty, net sales rose 1% to $5.3 billion, and organic sales grew 3%. Volume growth, which was driven by double-digit growth in developing regions, grew 5% as organic volume, which excludes the net impact of acquisitions and divestitures, rose 6%. Net earnings rose 2% to $896 million.
Grooming net sales rose 3% to $2.2 billion on a 5% increase in unit volume. Organic sales rose 6%. Volume growth was led by high single-digit growth in developing regions, while developed regions delivered low-single digit growth. Volume in male grooming increased mid-single digits primarily because of blades and razors in developing regions and deodorants in North America. Net earnings rose 11% to $482 million.
In health care, net sales rose 2% to $3.1 billion on unit volume growth of 5%. Organic sales grew 5%. Volume was up high-single digits in developing regions and mid-single digits in developed regions. Volume growth was led by oral care, which was up high-single digits thanks to the success and incremental merchandising support behind Crest 3D White in North America; Oral-B toothpaste expansions in Brazil, Belgium and Holland; and Pro-Health innovation in multiple markets around the world. Net earnings slipped 1% to $531 million due to higher marketing spend and higher commodity costs.
For fiscal year 2011, net sales are expected to increase 3% to 5%, and the company maintained its guidance for organic sales growth of 4% to 6%. Diluted net earnings per share from continuing operations are expected to be between $3.89 and $3.99, up 10% to 13%. Core EPS is expected to be between $3.91 and $4.01, up 7% to 9%.
Walmart, Pacific World give sneak peek of GeoGirl
NEW YORK — At a press event in New York on Wednesday, Pacific World and Walmart officially took the wraps off a new eco-friendly beauty line for tweens, aptly named GeoGirl.
The line, which has a suggested retail price between $3.98 and $5.98, is launching exclusively at about 1,250 Walmart stores and on Walmart.com beginning in March. The 69-SKU collection includes makeup for face, lips, cheeks and eyes, as well as skin and body care. A GeoGirl website is slated to launch Feb. 24.
After much consultation with parents, educators and tween girls in cities throughout the United States, Pacific World developed the line, which is positioned as an entirely new approach to beauty — it isn’t about toy makeup or painting little girls to look like mini-adults, but is all about being age appropriate and eco-friendly.
Keeping in tune with this tech-savvy audience, GeoGirl products are named in "textese." Products in the collection include:
J4G (Just 4 Grins) lip balm SPF 15;
GeoGirl SWAK (SentWithAKiss) lip treatment SPF 15;
BCNU (BeSeeingYou) pressed mineral shadow;
F2F (Face2Face) moisture tint SPF 15;
T2G (Time2Go) cleanser; and
KEWL (Cool) magic face refresher. The colors go on extremely sheer and see-through to give skin a healthy, natural glow and the formulas are mistake proof and easy to apply.KEWL (Cool) magic face refresher. The colors go on extremely sheer and see-through to give skin a healthy, natural glow and the formulas are mistake proof and easy to apply.
In addition, the product packages were created to fit in smaller hands and apply to smaller features. In line with the findings of a recent online study conducted in December 2010 at AllyKatzz.com, the formulas are made with 100%-natural fragrances and the packaging is made of such recyclable materials as renewable corn and recycled paper. The formulas are free of parabens, phthalates, sulfates, propylene glycol, PABA, DEA, petrolatum, paraffin, synthetic fragrance, synthetic color (in skin care), carmine (crushed beetles) and animal ingredients (except cruelty-free honey, lanolin and beeswax).
According to the survey of 270 girls, conducted in partnership with tween authority and social networking site AllyKatzz, generation Z girls have an incredibly evolved social and environmental consciousness. In fact, 74% of respondents said they were "environmentally responsible every day" and 98% said "it is important to donate time and money to causes and to others less fortunate."
These findings are one of the key reasons the GeoGirl brand created gg-Gives, a charity that will fund causes that girls care about. A portion of the GeoGirl net proceeds will be donated to gg-Gives.
Lumene looks to better reach consumers with product updates
NEW YORK — Lumene, a beauty brand from Finland that came to the U.S. beauty market in 2003 through an exclusive deal with CVS/pharmacy, is gearing up for growth in 2011 with revamped formulas and new packaging to better communicate with the U.S. consumer.
Since entering the marketing in 2003, Lumene has garnered an impressive following and has expanded beyond CVS’ store base of about 7,100 stores to roughly 3,400 Walgreens stores, 400 Ulta locations and 103 Sears stores. The brand also is available in select Target, Wegmans, Meijer and Giant Eagle locations.
“We have been very selective and cautious about rolling out to other retailers. … We have a tremendous partnership with CVS and they have really helped steer us and guide us from a marketing perspective in the U.S. market," Joe Pastorkovich, VP North America for Lumene, told Drug Store News. " We know our products and [CVS knows] the U.S. consumer, so they have been critical to our success here."
"[CVS has] also been very supportive of us going out into other retailers as well," Pastorkovich added. "They want to see this brand get bigger and they’ll benefit from us growing. But in order to really start activating media and marketing, we need to have a broader base of distribution.”
As Lumene works to expand distribution selectively and to find additional partners who will support the brand, the company also is focused on enhancing communication with its U.S. consumers. As part of that effort, the new packaging features a new “Lumene Finland” logo and more information about the product and its unique ingredients.
“Almost 100% of the women in focus groups said they like having an understanding of the point of origin of this product, and attaching the word ‘Finland’ to the logo was going to be helpful for them to understand that this is a European product and has a European heritage,” Pastorkovich said. “They connected Finland with beautiful women with beautiful skin, and also [with] high-quality and natural ingredients, so we felt it was a win to go forward with our new logo.”
Some of the new packaging more clearly calls out what the product does, such as reduces puffiness or fights wrinkles. In addition, the packaging now features information on the natural ingredients, including Arctic Cloudberry or Arctic Heather, which are used within the products. “These [ingredients] are the core of the Lumene brand, and what makes us unique and different is that we have these very specialized, natural ingredients that are found only in the Arctic area of Scandinavia. And we are telling the consumer what this is all about,” Pastorkovich said.
To help her understand which product line is best for her specific needs, the revamped packaging also includes an “age bar” to clearly communicate the suggested age of use. For example, the Vitamin C+ Plus line is geared for women ages 25 years and older, the Time Freeze line is designed for women ages 40 years and older, and the Premium Beauty line is ideal for women ages 50 years and older.
With regard to the formulas, Lumene has increased the level of natural ingredients within all of the formulas so the full line has a minimum of 80% natural ingredients, and the formulas now are free of parabens.
Lumene also has several new launches, including the new Time Freeze eye perfecting treatment that just launched at CVS for 2011. This “instant lift serum” promises to diminish puffiness and firm the skin around the eye area with the Artic Heather and metabiotics resveratrol. “It is almost like a completely new launch for Lumene in the U.S. market — all new product formulas, new product names and packaging,” Pastorkovich said.