P&G generated net sales of €16.2bn ($19.7bn) for Q2 fiscal 2021, up 8% on the previous year. Net earnings for the quarter came in at €3.16bn ($3.85bn), up 4% on the previous year.
Sales growth was spurred by a 12% net sales rise in fabric and home care; 9% rise in health care; 6% rise in beauty; 6% rise in baby, feminine and family care; and a 5% net sales rise in grooming. Worldwide, P&G reported a 12% sales lift in each of its two largest markets: North America and China.
The personal care major raised its 2021 fiscal growth outlook further following the release of its Q2 earnings, from 3-4% to 5-6% versus fiscal 2020. The company also raised its outlook for organic sales from 4-5% to 5-6% all-in growth.
Focused on ‘post-crisis dynamics’ – personal care opportunities and challenges
Speaking to analysts on the company’s Q2 earnings call last week, Jon Moeller, vice chairman, COO and CFO of P&G, said “pre-COVID momentum” had helped propel the company’s success through the latest quarter and provide “broad-based growth” across the company’s global portfolio.
Moeller said the company was now looking towards a future, post-COVID.
“I want to talk a little bit about post-crisis dynamics. While we will undoubtedly experience some volatility as we move to a new reality, and quarterly results will not move in a straight line, we’re optimistic about our post-crisis prospects,” he said.
Many of the strong headwinds linked to COVID-19 should “abate or disappear” entirely, he said, though current tailwinds would also dissipate. Overall, different sectors of P&G would be impacted differently, he said.
As consumers continued to spend more time at home – a trend likely to continue its rise, Moeller said P&G’s family, fabric and home care businesses would be boosted but its grooming, high-end beauty brand SK-II and deodorants negatively impacted.
“We will serve what will likely become a forever altered cleaning, health and hygiene focus, for consumers who use our products daily or multiple times each day.”
‘Superiority’ spotlight to continue at P&G
Moeller said consumers would increasingly turn to “superior performance” of products, securing revenue for established and reputable brands that “solve newly framed problems better than alternatives”.
As outlined before, he said P&G would continue its focus on driving superiority across its portfolio – raising the bar on products, packaging, brand communication, retail execution and value.
“Superior offerings, delivered with superior execution, drive market growth. Leading category growth with superior offerings mathematically builds market share and builds business for our retail partners.”
A “lasting shift to e-commerce” would also be an important shift to watch, he said – a space P&G was “well-positioned” in.
Short-term to long-term COVID-19 challenges and prospects
Short-term, Moeller said P&G would continue to operate with high unemployment levels in markets with “social unrest and economic distress”, likely facing continued channel disruptions and potential supply chain challenges.
However, he added: “We very much like our long-term prospects.”
“…We created strong momentum, well before the COVID crisis. We strengthened our position further during the crisis, and we believe P&G is well positioned to serve the heightened needs and new behaviours of consumers and our retail and distributor partners post-crisis.”