Baby, Feminine and Family Care’s 1Q16 results
Procter & Gamble’s (PG), or P&G’s, Baby, Feminine and Family Care net revenue came in at $4.7 billion in 1Q16. This was 12% lower than 1Q15. Organic sales for this segment fell 3% as pricing benefits along with product mix were more than offset by lower volume in each of the three businesses.
Fall in volume
In the United States, baby care value share was up nearly one basis point over a year ago, with Swaddlers growing value share over two basis points from last year. However, baby care volume fell due to competitive activity and increased pricing.
Feminine care organic sales fell primarily due to devaluation pricing in developing markets and pipeline inventory from the adult incontinence launch in the base period in the United States and Western Europe. Feminine care volume fell due to price increases in the previous fiscal year.
Family care organic sales were down by mid-single digits due to exiting underperforming product lines in Mexico and distribution losses in Canada. Changing consumer habits have increased competition across the globe. Like P&G, Kimberly-Clark Corporation (KMB), The Clorox Company (CLX), and Unilever (UL) are focusing on innovation and new technology to improve consumer value.
Improve point-of-market entry
The company plans to accelerate premium innovations on both taped and pull-on diapers to restore its competitiveness at the top end of the market. P&G is also strengthening its selling resources and programs for baby stores. The company also plans to improve its point-of-market entry programs to deliver higher awareness and more Pampers trials among new moms.
Reducing number of agency relationships
P&G is planning to simplify and reduce its number of agency relationships, focusing on upgrading agency capability to improve creative quality and communication effectiveness at a lower cost. As part of this plan, the company will be focusing on profitable premium-tier tissues in Mexico, and de-emphasizing conventional lower-value tissue products.
P&G has exposure to the iShares Dow Jones US ETF (IYY), with ~1.0%[1. Updated October 26, 2015] of the total weight of the portfolio.