P&G profits take a hit as marketing increases
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Procter & Gamble says higher marketing spend is responsible for lower than expected profit in results out today.
The FMCG manufacturer that owns brands including Gillette, Ariel and Pampers reported a 12% fall in profit to $2.19bn (£1.37bn) in the three months to 30 June.
Sales in the period increased 5% to $18.93bn (£11.9bn).
P&G says increased investment in marketing, advertising and product innovation impacted its profit.
The company injected an additional $1bn to its advertising spend in the past year making its total spend $8.6bn (£5.4bn), the equivalent of around 11% of total sales.
Bob McDonald P&G chief executive officer, says: “We are executing on all three dimensions of our growth strategy - touching and improving more consumers’ lives, in more parts of the world, more completely.
“The investments we’ve made in innovation, marketing support and consumer value have delivered accelerating unit volume and profitable market share growth throughout the year, which are clear indications that our strategy is working.”
Last week P&G revealed a global sponsorship deal with the Olympics.
Read an in-depth analysis of what the global sponsorship means to P&G here. P&G aiming for gold with Olympic partnership
YouGov Insight:
· 17% of main shoppers use Sainsbury’s for the bulk of their shopping
· The most popular reason given for shopping at Sainsbury’s is that ‘the availability of food is always good’
· 38% of Tesco shoppers use Sainsbury’s for their secondary shopping
· Sainsbury’s highest regional consumer penetration is in London (25%) and the lowest is in Scotland (9%)
· 17% of main shoppers use ASDA for the bulk of their shopping
· The most popular reason given by consumers for shopping at ASDA is that they have ‘plenty of special offers’
· ASDA is the least vulnerable to consumers switching from them and currently benefits from consumers being disloyal to other stores
· ASDA’s highest regional consumer penetration is in Scotland (20%) and the lowest is in the East (10%)
Readers' comments (1)
Brandt | Tue, 3 Aug 2010 4:11 pm
From our experience, Earnings seem to be routinely leaked. Two weeks ago I correctly predicted 14 of 16 company's earnings using my proprietary indicator and wrote about my analysis BEFORE they reported. I started again this Sunday with PG and PFE, posting the direction of both 3 days ago. This morning, both were right on. And it just came in I hit a 3rd, 3 for 3 this week! Here's the story:
http://www.trade-guild.net/2010/08/3c-hits-2-more-for-wows-members.html
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