Johnson & Johnson’s Consumer Segment’s 4Q16 Earnings

Consumer segment

Johnson & Johnson’s (JNJ) Consumer segment’s revenue rose 3.4% to $3.4 billion in 4Q16 compared to 4Q15. This rise included an operational rise of 4.9%, which was offset by a currency impact of -1.5%. Venezuela’s currency devaluation impacted JNJ’s worldwide growth by ~0.4% during 4Q16.

Johnson & Johnson’s Consumer Segment’s 4Q16 Earnings

Baby care franchise

The segment’s baby care franchise contributed ~14.4% of its total sales in 4Q16. The franchise’s sales fell 3.9% to $493 million in 4Q16, including an operational fall of 2.3%, following competition in international markets and a consumer shift to premium products due to competition in the United States.

In the US market, Aveeno reported strong baby products sales. Growth in international markets was driven by JNJ’s acquisition of Hipoglos, but Indian demonetization and lower cleanser sales offset this growth.

Oral care franchise

The oral care franchise contributed ~11.6% of the segment’s sales in 4Q16. The franchise’s sales fell 2.7% to $397 million in the quarter, including an operational fall of 1.6% and the negative impact of foreign exchange.

The franchise’s revenue fall was due to the company’s divestiture of Rembrandt and lower sales of its mouthwash products in the United States. International markets reported growth due to successful marketing campaigns and the geographical expansion of the Listerine brand.

Over-the-counter franchise

The segment’s over-the-counter franchise contributed ~30.3% of its 4Q16 sales. The franchise’s sales rose 2.1% to $1.0 billion in the quarter, following rises in the sales of its analgesics and Zyrtec products, allergy medication products, and relaunched digestive health products in the United States, its anti-smoking aids in international markets, and its Imodium products in Canada and the EMEA (Europe, the Middle East, and Africa). These rises were partially offset by the company’s divestiture of BeTotal.

Beauty franchise

The segment’s beauty franchise, formerly referred to as its skincare franchise, saw a 17.7% rise in sales to $1.1 billion in 4Q16, following the strong performance of Neutrogena in both US and non-US markets. The company also acquired beauty products from Vogue International, Light Mask, and NeoStrata in the United States.

Women’s health franchise

The segment’s women’s health franchise’s sales fell 6.7% to $264 million in 4Q16, including an operational fall of 4.4%. Its sales were majorly impacted by the devaluation of Venezuela’s currency. The company also divested its Tucks brand to Blistex in July 2016.

Wound care and other franchise

The wound care franchise’s sales fell 9.7% to $176 million during 4Q16 due to the company’s divestiture of its Splenda brand.

Other major consumer sector companies include Unilever (UN), Nestle (NSRGY), Kimberly-Clark (KMB), and Procter & Gamble (PG). Investors can consider ETFs such as the iShares Core High Dividend ETF (HDV), which holds 5.9% of its portfolio in Johnson & Johnson.