New markets continue to serve as important drivers in beauty growth for four major U.S. players, as did successful product launches that reinforced brand leadership in innovation. Here are some highlights from their respective earnings calls:
*Procter & Gamble’s SK-II skin care brand has reached $1 billion status; Olay faces U.S. challenges: The high-end skin care brand joins the ranks of Olay and Pantene. However, executives acknowledged that Olay has not been keeping pace in the U.S., and intense research and development is under way on new products to help regain market share. They pointed to Olay Smooth Finish Facial Hair Remover as a recent success, with sales 50% higher than expected. “We think of true innovation as something that expands the category or creates a new category,” said Bob McDonald, Chairman, President and Chief Executive Officer in a Q&A with analysts. In the quarter, P&G’s net sales increased 2% to $20.2 billion, with its beauty segment up 1% to $4.8 billion. In hair care, high single-digit growth in developing regions helped compensate for mid-single-digit declines in developed markets, the company noted.
*Revlon’s Almay to undergo makeover: “We are looking at the [cosmetics] wall, graphics and packaging,” said Revlon President and Chief Executive Officer Alan T. Ennis in reference to an overhaul at Almay. The brand, which named Julie Marchant-Houle as Vice President Marketing and Global Portfolio Leader in October, also plans to effectively leverage spokesperson Kate Hudson in future campaigns. Revlon Inc. unleashed several new Revlon products in the quarter, helping boost sales of its namesake brand, including ColorBurst Lip Butter and ColorStay Longwear Nail Enamel. For the quarter, the company posted sales of $330.7 million, down from $333.2 million the previous year, with sales gains in two markets—Asia-Pacific increased 5.6% to $56.1 million and Canada grew 3.5% to $17.8 million.
*John Frieda drives Kao Brands success: Strong sales of John Frieda foam hair color and other hair styling products were realized in North America and Europe. Kao posted full-year results ending March 31, showing sales of $14.79 billion up 2.5%. Of that, beauty care represented $6.54 billion, up 0.8%. Earlier this year, as part of management realignment, the company named John Nosek as the new President of Kao U.S.A. Meanwhile, in its core Japanese region, sales of premium hair care decreased and hair coloring products were also weak, due to “market contraction and intensifying competition,” according to the company. Outside Japan, the company is looking to build up facial cleansers and body cleansers businesses, along with increased emphasis on foam hair color opportunities.
*Emerging markets help Unilever: “Emerging markets, now 56% of the business, have again delivered strong growth and whilst the good performance in developed markets was against a weak prior year comparator,” commented Paul Polman, Unilever, Chief Executive Officer. In hair care, the TRESemme brand in Brazil drove growth, with its Axe hair care brand now rolling out in Europe. Dove NutriumMoisture shower gels and Dove Men+Care, along with the launch of Simple skin care in the U.S., were potent sales contributors. Unilever’s underlying sales (excludes currency fluctuations and acquisitions) in the quarter rose 8.4% to $16.03 billion, with sales in emerging markets up 11.9% and developed markets up 4.2%. Personal care grew 10.4% to $5.64 billion, at current exchange rates.
