Procter & Gamble (P&G) believes there is still room to invest and grow in the grooming category despite its ongoing poor performance and the impact this is having on overall business results.
Organic sales of grooming products at P&G, which owns grooming brands including Gillette, Venus and Braun, decreased 1% in its third quarter results, while net sales were down 8%.
Speaking on a call to investors today (23 April), P&G’s vice chairman and chief financial officer Jon Moeller, said while the company is not where it wants to be in terms of growth in the category, it is “not a disaster by any means”.
Where P&G does see a big opportunity to improve its performance, and where it is “investing more”, is through its new Gillette Skinguard product for sensitive skin.
“We have the potential to increase usage, bring men back into the category who have left, or increase shave frequency,” Moeller said, adding that it is already seeing this in Europe especially.
“But we probably do need to invest more to get significant awareness,” he admitted. And while Moeller said it would be “very unusual in an industry as competitive as this” that P&G will always win against its competitors, “if we can win two-thirds of those encounters we are likely to drive disproportionate top and bottom line growth”.
P&G performed well in other categories, with beauty sales up 9%; fabric and home care sales up 7%, largely driven by a significant reduction in promotional activity; health care up 5%; and baby, feminine and family care up 2%.
This contributed to overall net sales of $16.5bn (£12.7bn), an increase of 1% versus the previous year.
Moeller said P&G will continue to invest in “smart opportunities” it believes will increase its “superiority advantage”.
“Where we find smart opportunities to invest, we are going to invest,” he said. “We really believe in these categories where performance drives brand choice we need to be superior and we are very determined to deliver that. That doesn’t mean we’re going to do super things, we are very focused on return. But we know superiority delivers return in categories.”