The Procter & Gamble Company posted second quarter fiscal year 2016 net sales of $16.9 billion, a decrease of nine percent versus the prior year due primarily to foreign exchange impacts. Organic sales, which exclude the impact of foreign exchange and acquisitions and divestitures, increased two percent.
Net sales in the second quarter of fiscal year 2016 were $16.9 billion, a nine percent decrease, including a negative eight percentage point impact from foreign exchange and three percentage point impact from the Venezuela deconsolidation and minor brand divestitures. Organic sales increased two percent as a three percent pricing benefit more than offset a two percent reduction in organic shipment volume. Organic sales were in-line or higher in all five reporting segments. All-in and organic volume declined three percent and two percent, respectively. Pricing increased net sales in all five business segments and increased total net sales by three percent.
Beauty segment organic sales increased one percent as a positive four percent impact from pricing was partially offset by a three percent impact from lower organic volume. Organic sales increases in Personal Care and the super-premium SK-II skin care brand were partially offset by organic sales declines of the Olay brand.
Grooming segment organic sales increased three percent as higher pricing in shave care and growth on Braun from innovation more than offset lower volume. Organic sales increased globally in shave care and in Braun in developed markets.
In Hair Care, P&G launched a new conditioner innovation on Pantene in the US earlier this month. Pantene’s new breakthrough conditioner technology aims to deliver weightless conditioning, addressing the most significant consumer trial area for conditioners.
Recently P&G launched two new Head & Shoulders variants in the US – Instant Fresh and Nourishing Care and an upgraded Head & Shoulders consumer message with a new campaign: Use daily to stay 100% flake free for life with Head & Shoulders scalp shield technology.
P&G said it is maintaining its outlook for organic sales growth of in-line to up low-single digits versus fiscal 2015. The firm expects all-in sales to be down high-single digits in fiscal 2016, now including a negative seven percentage point foreign exchange impact and a two to three percentage point drag from the combined impacts of the Venezuela deconsolidation and minor brand divestitures.
“Continued digitization has been and will be a big enabler of our overhead and manufacturing enrollment efficiencies. We’re reducing non-working marketing expenditures—costs that do not impact reach, do not impact frequency. Last year we reduced the number of agencies we worked with by nearly 40% and cut agency and production spending by about $370 million. We’re aiming for an additional $200 million of agency-related savings this year. These are non-working savings that enable us to invest in advertising and in trial of consumer-preferred products. We’re strengthening our working marketing programs—greater reach, higher frequency, greater effectiveness, at less overall marketing costs,” said Jon Moeller, P&G’s Chief Financial Officer.