Recent performance of beauty franchise
In its fiscal first quarter, Johnson & Johnson (JNJ) reported sales of $1.1 billion for its beauty franchise. It’s the company’s largest division, contributing ~32% to total consumer segment sales of $3.4 billion. The company’s beauty business registered an operational growth of 7.1% in the fiscal first quarter YoY (year-over-year).
The company has seen strong growth in its beauty business, driven by the following:
- favorable timing for Neutrogena and Aveeno suncare products
- US market growth
- strength of Dr. Ci:Labo and OGX products
- international expansion of Maui moisture product
Major growth drivers and strategic initiatives for beauty segment
JNJ has been experiencing a disruption in its consumer products market and is working to establish initiatives and strategies to sustain its market position and growth. According to JNJ, it’s the fifth-largest company in the world in the beauty products market. The market is expected to grow at a CAGR (compound annual growth rate) of 7% from 2017 to 2022. Global beauty market revenues are expected to grow to $90 billion by 2022.
With its Neutrogena brand, Johnson & Johnson is focused on a disruptive innovation, which includes high-tech beauty, which it expects to strengthen its leadership in the beauty market. With consumer trends shifting to natural products and solutions, even in the beauty space, and a focus on overall wellness-derived beauty, JNJ believes it’s well positioned with its Aveeno brand.
Its OGX products are driving significant growth for its consumer business, and the company is expanding into new segments with the products. OGX was added to JNJ’s consumer segment with the acquisition of Vogue in 2016.
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