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Procter & Gamble: Grooming Sales Remain Unchanged for 1Q16



Procter & Gamble’s grooming business performance

In 1Q16, net revenue for Procter & Gamble’s (PG) grooming business came in at $1.7 billion. The segment’s net sales were 14% lower than those of 1Q15. The change in sales was primarily due to the unprecedented impact of forex, which reduced the top line by 13%.

In addition, continuing growth of competitors such as Estée Lauder Companies (EL) and Unilever (UL) in men’s grooming products, and the introduction of Dollar Shave Club has led to slower growth in markets, including that of the United States.

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Organic sales

Conversely, organic sales for the grooming segment were unchanged. An increase was driven by higher pricing on blades and razors and growth of Braun due to innovation and increased trade support. However, this was partially offset by negative geographic and product mix, as well as lower volume in blades and razors due to competitive activity.

Consumer value communication

The company plans to innovate its Gillette FlexBall and Venus Swirl products to extend the product performance advantage. Procter & Gamble, or P&G, plans to support a broader range of its grooming products, from Fusion ProGlide, to MACH3 systems, to premium-priced and superior performance disposables with strong consumer value communication.

With continued growth, P&G recently launched FlexBall in Latin American and Central and Eastern European markets. In less than 18 months, 25 million FlexBall razors have been distributed around the world.

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In-store innovation

Like peers Kimberly-Clark Corporation (KMB) and Colgate-Palmolive Company (CL), P&G focuses on in-store innovation in order to attract consumers as well as meet retailer expectations. For example, P&G has introduced hard tags for Gillette, making it much easier for consumers to shop.

Online shave club

P&G has initiated an online Gillette Shave Club in order to increase customer base and sales. P&G aims to build partnerships with e-retailers and retailers, who will offer shoppers subscription tie-ins to the Gillette Shave Club.

P&G has exposure to the PowerShares S&P 500 High Dividend Low Volatility Portfolio ETF (SPHD), with 1.5%[1. Updated October 24, 2015] of the total weight of the portfolio.


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