P&G and L’Oréal results underline challenges and resilience
Despite the pandemic, both P&G and L’Oréal have reported financial results that indicate the two multinationals are riding out the pandemic storm well.
The news is generally positive, although both businesses did report areas of weaknesses on account of the worldwide lockdowns, which first began in China at the end of January.
Earlier this month P&G announced that its net sales were up 4% to $17.7 billion thanks to gains in all of its business areas, except in beauty, which dropped 1% and grooming which dropped 5%.
The losses in beauty were attributable to a double digit drop in sales of its premium SK-II brand, which was hit because of reduced travel, although this was partially offset by gains in hair care and personal cleansing products.
Despite the impact of the beauty, the overall picture looks good for P&G, according to its CEO David Taylor, who believes the company will continue to post positive results for the duration of the pandemic.
“We expect to grow through this crisis and come out even stronger on the other side,” Taylor said.
L’Oréal’s results did not paint such a rosy picture, with sales for the first half of 2020 dropping by 11.7% on a like-for-like basis to reach €13.07 billion. The decline meant that profit for period dropped by 13% to €2.1 billion.
Reflecting the tough pandemic lockdowns, sales declines were most dramatic in Western Europe, where revenues for the first six months of the years fell by 16.1%, with revenues in Spain and Italy falling dramatically.
However, the company also said that the trajectory has been very much on the up since the month of May, as many lockdown measures have been lifted, which a spike in internet sales has also helped to counterbalance declines.
CEO Paul Agon believes the company’s performance has shown its resilience by ensuring the health of its workers and overcoming a series of crisis in its supply chain, caused by the pandemic.
“In these exceptionally difficult circumstances, each division of L’Oréal has demonstrated great business resilience,” Agon said.
Amazon teams up to fight counterfeit
In the US, Amazon has teamed up with KF beauty to file a lawsuit against four companies for allegedly selling counterfeit KF products on Amazon.
The lawsuit names 16 individuals who the legal action states violated Amazon’s e-commerce platform rules.
Filed in the United States District Court for the Western District of Washington, the lawsuit alleges that the defendants worked together to sell the counterfeit KF Beauty products through the Amazon platform.
Amazon says it has already refunded customers that received the counterfeit products and that if the defendants are found guilty any damages paid will be reimbursed to KF Beauty.
Amazon has been working hard to crack down on the sale of fake cosmetic and personal care products, as well as other luxury consumer goods it sells on its platform.
As part of measures to tackle the problem, the digital retailer has launched its own counterfeit crimes unit, while also testing live seller verification methods.
“The majority of sellers in our store are law-abiding entrepreneurs, but we will take aggressive action to protect customers, brands, and our store from counterfeiters,” said Cristina Posa, associate general counsel and director of the Amazon Counterfeit Crimes Unit.
“Amazon and KF Beauty are holding these companies and individuals accountable, and we appreciate the close cooperation we’ve had in this investigation.”
Colombia to ban animal testing
Colombia has signed into being a bill that will outlaw the testing of cosmetics on animals and ban the import of animal-tested cosmetics by 2024.
Bill 120/2018 passed the Colombian senate will also restrict reliance on animal testing for ingredients used in cosmetic and personal care formulation.
The bill passed both the senate and the house of representatives earlier this summer, and was finally signed as a law by Colombian President Iván Duque Márquez last week.
“This is a great step forward for our society, after the Animal Abuse Law, the prohibition of testing of cosmetics on animals marks a fundamental path in the development of legislation for the protection and defense of all animals in Colombia,” House Representative and bill author Juan Carlos Losada.
“The use of animals in laboratories is a subject that has not received the necessary attention, millions are suffering in the world and at least in Colombia we must pay all the necessary attention.”
In 2017, Guatemala become the first Latin American country to take legislative action to end animal testing for cosmetics products and ingredients.
Edgewell Personal Care to acquire Cremo Company
In the US, Edgewell has further expanded its beauty and personal care portfolio with the addition of men’s grooming business Cremo Company.
In an all-cash transaction, Edgewell will pay a purchase price of $235 million for the business.
Cremo has proven to be one of the fastest growing masstige men’s grooming brands in the US, offering an extensive range of beard care, hair care, shaving and skin care products.
According to executives at Edgewell, that addition of the new business to the portfolio will complement insurgent brands that include Jack Black and UK brand Bulldog, because it serves such a unique consumer profile.
“The men’s grooming category remains a strategic focus for Edgewell and this acquisition will help us accelerate growth and strengthen our position in the fastest growing categories in men’s grooming,” said Rod Little, Edgewell’s President and Chief Executive Officer.
“We are acquiring a profitable, growing business with an established presence that is well diversified across grooming categories, yet has significant opportunities for expansion. We are extremely impressed with the Cremo brand and its positioning and expect it to continue to resonate over the long term with consumers.”
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