1Q16 highlights for consumer packaged goods
Revenue results for consumer packaged goods (or CPG) companies for 1Q16 were mixed. Procter & Gamble (PG) and Colgate-Palmolive (CL) started the quarter on a disappointing note with lower sales. Clorox (CLX) and Church & Dwight (CHD) came in ahead of Wall Street analysts’ revenue expectations. For Kimberly-Clark (KMB), revenue declined 4.5%, missing Wall Street estimates.
Factors that impacted revenue
Procter & Gamble’s net revenue declined 6.9% to $15.8 billion in fiscal 3Q16. Reported revenue was negatively impacted by a 5% decline in foreign exchange, a 2% decline in Venezuelan deconsolidation, and a 1% decline in minor brand divestitures.
Colgate-Palmolive’s net revenue declined 7.6% to $3.8 billion in 1Q16. Reported revenue was negatively impacted by an 8.0% decline in foreign exchange, divestitures, and the impact of previously discontinued Venezuelan operations.
However, for Clorox, revenue increased 1.8% to $1.4 billion in fiscal 3Q16. It increased as benefits of pricing and volume growth across all business segments were partially offset by unfavorable foreign exchange. Church & Dwight’s revenue increased 4.5% to $0.8 billion in 4Q16, driven by its domestic and international consumer businesses.
Organic sales increased for all CPG companies. Organic sales for Procter & Gamble increased 1%, benefiting from a 1% rise in pricing. For Kimberly-Clark (KMB), organic sales increased 2% in 1Q16. For Church & Dwight (CHD), organic sales increased 3.6% in 2015.
Colgate-Palmolive’s (CL) organic sales increased 5% in 1Q16, benefiting from pricing and a unit volume increase. Clorox’s fiscal 3Q16 organic growth increased to 5.1% compared to 4.6% in fiscal 3Q15.
Coping with currency headwinds and inherently slower secular growth, these companies will likely have to innovate in order to have better top-line growth.
In the rest of this series, we’ll see how a stronger US dollar has impacted CPG companies and whether innovation will help improve revenue.