P&G's Quarterly Volumes Impacted by China's Beauty Business
Procter & Gamble (P&G) experienced a decrease in quarterly volumes due to its beauty business in China, according to Chief Financial Officer Andre Schulten. Despite this, overall volume sales would have shown a slight increase in the fiscal first quarter if it weren't for China. The company's performance in China saw a decline of 8% to 9% in volumes, offsetting volume growth in the U.S. and Western Europe.
Factors contributing to P&G's performance in China include a deceleration in domestic travel retail and consumers becoming more selective with their spending habits due to economic concerns and real estate issues. Additionally, the backlash against Japanese beauty brands in China, following Japan's decision to release Fukushima wastewater into the Pacific Ocean, affected one of P&G's main premium skincare brands in Asia, SK-II.
P&G expects a turbulent recovery in the Chinese market but remains committed to maintaining its portfolio of beauty products and making significant investments in its beauty offerings. Despite cautious consumer behavior, P&G believes that China will eventually return to mid-single digit growth.
In the fiscal first quarter ending on September 30, P&G reported a 15% increase in profit, driven by a 7% boost in revenue from higher prices.
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