Penny Morgan

In 2014, Philip Morris’s Latin America and Canada segment reported a 2.3% decline in net revenues. The region had the company’s lowest revenues, at 11%.

For fiscal 2Q16, Wall Street analysts’ consensus revenue estimate for Clorox is ~$1.3 billion, a 3.4% rise from the same quarter last year.

International brands such as Estée Lauder (EL), L’Oréal (LRLCY), Procter & Gamble (PG), Shiseido (SSDOY), and Nivea (BDRFF) dominate the cosmetics market in China.

In fiscal 3Q16, Coty missed Wall Street analysts’ consensus expectation for revenue after beating the expectation in the previous quarter.

Coty is trading at a higher valuation relative to the S&P 500 Index and the Dow Jones Industrial Average. Coty is trading at a forward PE multiple of 30.3x.

Philip Morris International (PM) released its 1Q16 earnings on April 19, 2016. The company’s adjusted diluted EPS fell 15.5% to $0.98 compared to $1.15 in 1Q15.

The Procter & Gamble Company, or P&G, is the largest household and personal products company in the world. It was established in 1837 by William Procter and James Gamble.

Estée Lauder aims to partner with key brick-and-mortar retailers to strengthen their prestige beauty shopping e-commerce websites to better meet consumer online shopping preferences.

Despite currency headwinds, Estée Lauder’s (EL) worldwide gross profit margin increased to 80.3% in fiscal 2014 from 80.1% in fiscal 2013.

Procter & Gamble (PG) reported a slight improvement in its core gross margin in 2Q16. Its reported gross profit margin increased 170 basis points that quarter.

Coty (COTY) and L’Oréal (LRLCY) are trading at higher valuation multiples relative to the S&P 500 Index (IVV)(SPY)(VOO) and the Dow Jones Industrial Average (DIA).

Colgate-Palmolive (CL) is geographically diverse and derives 77% of its total revenue from outside the United States.

Coty Inc.’s capital expenditure decreased 15.2% to $0.17 billion in fiscal 2015, compared to $0.20 billion in fiscal 2014.

With increasing competition from L’Oréal, Shiseido, and Coty, Estée Lauder continues to expand its position in Western Europe and emerging markets.

To improve its supply chain efficiency, Estée Lauder aims to utilize a network of third-party manufacturers on a global basis, including in the Asia Pacific region.

Estée Lauder’s sales growth was ranked third-highest globally among leading cosmetic companies between the years 2012 to 2015, with net revenue of $11 billion in fiscal year 2014.

Gross margin and free cash flow Philip Morris’s (PM) gross margin decreased 0.7 points to 65.5% in 1Q16, compared to 66.3% in 1Q15. Despite the adverse currency impact, Philip Morris is focused on generating strong free cash flow in line with last year’s level. The company’s free cash flow (or FCF) increased by more than […]

Procter & Gamble (PG) is set to release its fiscal 3Q16 earnings before the Markets open on April 26, 2016. In fiscal 2Q16, P&G missed revenue estimates for the fifth consecutive quarter.

For distribution in the United States, Clorox (CLX) sells or markets its products primarily through mass retail outlets, e-commerce channels, wholesale distributors, and medical supply distributors.

P&G plans to focus on superior brands in the 10 product categories in its portfolio. It expects one-third of them to surpass $1 billion in annual sales.

Estée Lauder aims to expand its geographical market share in China, the Middle East, Eastern Europe, Brazil, and South Africa by focusing on consumers who purchase in travel retail channels.

Altria Group’s (MO) wine segment’s 1Q16 net revenue rose 8.2% to $0.15 billion compared to $0.13 billion in 1Q15.

Like revenue, beauty companies’ calendar 1Q16 earnings gave out mixed signals to investors.

Estée Lauder has paid dividends ever since it went public in November 1995. EL’s cash dividends per common share fell 27.8% to $0.78 in fiscal 2014.

The 1Q16 margins of consumer packaged goods (or CPG) companies sent strong signals. These companies have been investing heavily in innovative products and other growth initiatives.

Coty (COTY) reported a fall in its gross margin in fiscal 3Q16. Its reported gross margin came in at 61.2% in fiscal 3Q16 compared to 62.3% in fiscal 3Q15.

Global cosmetics giant Coty’s consolidated revenue came in at ~$4.4 billion in fiscal 2015. Coty’s top ten power brands generated 72% of its net revenue in that period.

P&G reported $0.15 billion in gains from divestitures in fiscal 2014 and $0.63 billion in 2013. The sale of Wella and Clairol could be the biggest divestments yet.

Beauty companies’ revenues for 4Q15 conveyed mixed signals to investors. Although Procter & Gamble and Avon started the earnings season on a disappointing note with lower sales, Estée Lauder and Coty beat consensus Wall Street estimates.

Coty released its fiscal 3Q16 earnings on May 3, 2016. The quarter ended on March 31, 2016. The company’s adjusted diluted EPS fell 50.0% to $0.09.

Estée Lauder is trading at higher valuations relative to the S&P 500 Index, with a PE multiple of 29.0x forward earnings.

On February 29, 2016, Procter & Gamble (PG) announced the completion of the transfer of its Duracell business to Berkshire Hathaway (BRK-B).

Procter & Gamble’s stock has consistently fallen since the beginning of 2015. However, the stock was able to sustain some gains until September.

Net revenue for Philip Morris’s (PM) Asia region decreased 8.7% to ~$2 billion in 1Q16. This compares to $2.2 billion in 1Q15.

Colgate’s worldwide gross profit margin fell to 58.5% in 2014 from 58.6% in 2013.

Both Donald Trump and Hillary Clinton have expressed a desire to reshape the tax code to make substantive changes in fiscal policy.

While Donald Trump wants to get rid of the Dodd–Frank Act, especially the Consumer Financial Protection Bureau, Hillary Clinton wants to retain it.

Target’s (TGT) stock price fell 6.4% to $70.63 on August 17, 2016, after the company released its fiscal 2Q16 earnings.

Target’s (TGT) Signature Categories include Style, Baby, Kids, and Wellness. Target’s Signature Categories outpaced the total business by 3 percentage points in fiscal 2Q16.

Target’s (TGT) revenue declined 7.2% to $16.2 billion in fiscal 2Q16 from $17.4 billion in fiscal 2Q15.

Coty (COTY) reported a decline in its gross margin in 4Q16 as well as fiscal 2016. The reported gross margin came in at 56.7% for 4Q16.

After missing estimates last quarter, Coty came in ahead of Wall Street analysts’ estimates for revenue in fiscal 4Q16.

Coty (COTY) released its fiscal 4Q16 and full-year earnings on August 16, 2016. The quarter ended on June 30. Here’s what you need to know.

Altria’s (MO) 1Q16 gross margin rose to 58.6% compared to 57.9% in 1Q15.

Estée Lauder (EL) ended calendar 1Q16 with a 3.5% rise in inventory.

Beauty companies continue to expand into a multi-pronged digital strategy that encompasses e-commerce, m-commerce, as well as digital and social media.

The beauty and personal care sectors have seen a high level of merger and acquisition (or M&A) activity in the last two years.

As a result of decreased operating income, Philip Morris’s (PM) operating margin fell by 2.8% to 41.9% in 1Q16.

After the Brexit referendum, Philip Morris’s risk exposure increased compared to other tobacco companies.

The Wall Street consensus analyst expectation for Philip Morris’s adjusted diluted EPS in 2Q16 is $1.19 per share.

Tobacco companies are trading at higher valuations compared to the S&P 500 Index (SPY) (IVV) (VOO) and the Dow Jones Industrial Average (DIA).

1Q16 inventory levels were lower for tobacco companies due to falling cigarette shipment volumes.

Due to increased health consciousness, most of the tobacco companies’ 1Q16 cigarette shipment volumes have seen falls.

The US tobacco industry is highly concentrated Its three leading players accounted for a combined retail (XRT) volume share of 86% in 2014.

Consumer packaged goods (or CPG) companies are trading at higher valuations compared to the S&P 500 Index (IVV) (SPY) (VOO) and the Dow Jones Industrial Average (DIA).

On June 13, 2016, Coty’s (COTY) stock price was trading at $26.36. The stock price has risen 5.7% year-to-date (or YTD) and 29.0% since January 2015.

Operating income Reynolds American’s (RAI) reported operating income increased by 786.3% to ~$6.1 billion in 1Q16 versus $0.7 billion in 1Q15. This includes charges for implementation costs, asset impairment, and exit costs. It also includes transaction-related and financing costs for the Lorillard acquisition and related divestitures to Imperial Tobacco Group (ITYBY), as well as other […]

Estée Lauder’s makeup segment’s net revenue rose 7.3% in reported terms and 11% in constant currency terms to $1.2 billion in fiscal 3Q16.

Reynolds American’s (RAI) Santa Fe Natural Tobacco Company’s Natural American Spirit brand aligns with consumers seeking authentic products. The company notes that Natural American Spirit brand is made of natural, additive-free tobacco.

Colgate’s (CL) Asia segment’s net revenue decreased 2.3% to $0.6 billion in 1Q16.

Reynolds American (RAI) released its 1Q16 earnings on April 26, 2016. The company’s adjusted diluted earnings per share rose by 16.3% to $0.50 per share in 1Q16.

Reynolds American’s (RAI) key to transformation is robust results and an active innovation pipeline. The company formed RAI Innovation Company to seek alternatives to traditional cigarettes.

After beating revenue estimates last quarter, Estée Lauder came in line with consensus Wall Street Estimates on revenue in fiscal 3Q16.

On May 16, 2016, Estée Lauder’s stock price was trading at $92.79. Its stock price has risen 6.4% year-to-date (or YTD) and 22.8% since January 2015.

Altria Group’s (MO) smokeable product segment’s net revenue rose 3.8% to $5.4 billion in 1Q16 compared to $5.2 billion in 1Q15.

P&G reported a gross profit margin increase of 250 basis points to 49.8% in fiscal 3Q16, as compared to fiscal 3Q15.

Net revenue from P&G’s Baby, Feminine, and Family Care segment came in at $4.5 billion in fiscal 3Q16. This was 7.9% lower than in fiscal 3Q15.

Altria Group’s (MO) smokeless tobacco product segment’s net revenue rose 11.4% in 1Q16 to $0.5 billion versus $0.4 billion in 1Q15.

After missing revenue expectations last quarter, Altria came in ahead of analysts’ estimates in 1Q16. Analysts had projected revenue of $4.4 billion.

Altria Group (MO) released its 1Q16 earnings on April 28, 2016. Its adjusted diluted EPS (earnings per share) rose 14.3% to $0.72 in 1Q16.

Coty was trading at $29.80 on April 25, 2016. Its stock price has risen 45.9% since January 2, 2015, and 19.3% year-to-date.

PM’s increase in revenue on a constant currency basis was primarily due to favorable pricing of $0.1 billion, driven by Russia and Turkey, and partially offset by Ukraine.

Since December 2015, FX (foreign exchange) headwinds have increased $0.3 billion after tax. That includes devaluations in Argentina, Russia, and Mexico.

In Brazil, 70% of women are in the range of 18–49 years old, and Colgate has a lower CPM (cost per thousand) than TV for this group—60% of the cost.

Colgate is adding the greatest number of new shoppers among fast-moving consumer goods companies. Most are in India.

Colgate-Palmolive’s global market share is ~45%. It is the leading toothpaste compared to Oral-B and Close-up, especially in emerging markets like India.

Estée Lauder reported a slight decrease in its 2Q16 gross margin, which remained virtually flat from the prior year at 81.2%.

After a lawsuit was filed against Procter & Gamble (PG), or P&G, for its Old Spice deodorant, P&G’s stock price opened with a fall of 0.4% to $82.46 on March 24, 2016.

Beauty companies are trading at higher valuations relative to the S&P 500 Index (SPY) and the Dow Jones Industrial Average (DIA).

Generally recognized as the world’s best-selling international cigarette, Marlboro accounted for 33.7% of the company’s total shipment volume in 2015.

As of March 17, 2016, CPG companies were trading at higher valuations relative to the S&P 500 Index (SPY) and the Dow Jones Industrial Average (DIA).

Inventory levels in 4Q15 increased for most CPG companies YoY. The inventory turnover ratio for P&G in 4Q15 increased by 6.1% to 6.1x versus 5.7x in 4Q14.

Estée Lauder’s (EL) haircare segment’s revenue increased 8.7% in reported terms and 14% on a constant-currency basis to $0.15 billion in fiscal 2Q16.

The mounting increase in health consciousness poses a growing threat to the tobacco industry. Companies are investing heavily in innovative products.

Procter & Gamble’s stock price rose 1.6% to $82.55 after it announced the sale of its Hipoglós diaper rash cream to Johnson & Johnson (JNJ) on March 2, 2016.

Procter & Gamble is on a mission to trim brands that are holding back its overall financial performance.

Colgate’s (CL) revenue declined 7.5% to $3.9 billion in 4Q15. The reported revenue was negatively impacted by foreign exchange and divestitures.

Let’s discuss Coty’s margins. It reported a slight improvement in the adjusted gross margin in fiscal 1Q16. This adjusted gross margin rose 70 basis points.

Clorox was trading at $125.04 on January 25, 2016. Its stock price has risen 20.4% since January 2, 2015.

CPG companies’ 3Q15 margins sent strong signals. They have been investing in innovative products and other growth initiatives. This is impacting their margins.

CPG (consumer packaged goods) companies are trading at higher valuations relative to the S&P 500 Index (IVV) (SPY) (VOO) and Dow Jones Industrial Average (DIA).

Gillette, which controls more than 60% of the US retail (XRT) market, has 20% of the online shaving market.

P&G alleges that Dollar Shave Club is violating Gillette’s intellectual property by selling its razors.

Clorox (CLX) has a strong research and development (or R&D) team and devotes significant resources and attention to product development.

Advertising and promotional events from Unilever and PG’s home cleaners and a rise in the popularity of store brands pose threats to Clorox.

Clorox’s Lifestyle segment’s revenue increased 1.5% to $1 billion in fiscal 2015 compared to $0.9 billion in fiscal 2014. The increase was primarily due to higher shipments in natural personal care.

The Cleaning segment contributed 32.3% to the total consolidated sales of Clorox, the highest among all the segments. The increase was primarily due to higher volume growth.

Clorox’s (CLX) SG&A expenses increased 5.3% in fiscal 2015 compared to fiscal 2014. The increase was primarily due to increased advertising and marketing programs.

Due to Clorox’s diverse product portfolio and the competitive nature of the consumer products market, it’s difficult for a new company to compete with similar products.oducts.

Procter & Gamble’s stock price rose after it released earnings. The stock price rose 2.9% to $77.03 on October 23, 2015, after results were released.