Brands
P&G Health halves q-o-q marketing spends in Q4-2014, ups 3.2 per cent in FY-2014
BENGALURU: Consumer goods company Procter & Gamble Hygiene and Health Care Limited (P&G Health) reduced its ad and sales promotion spends (ASP) to less than half in the quarter ended 30 June 2014 (Q4-2014, current quarter) as compared to the immediate trailing quarter (Q3-2014). The company says that its focus on innovation and productivity continued to sustain growth momentum by delivering an increase in net sales.
P&G Health spent Rs 37.99 crore (7.8 per cent of Operating Income or TIO) towards ASP in Q4-2014 versus Rs 83.16 crore (16.6 per cent of TIO) in the quarter ended 31 March 2014 (Q3-2014) and was 33.1 per cent lower y-o-y than the Rs 56.75 crore (13.4 per cent of TIO).
Across 10 quarters starting Q4-2012 until the current quarter, its Q4-2014 APS spends both in terms of absolute rupees and as percentage of TIO were the lowest. Though in terms of absolute rupees, P&G Health’s ASP shows an upward linear trend, in terms of percentage of TIO, the linear trend is downwards.
Notes: (1) The company’s financial year ends on30 June, hence results for the quarter ended30 June 2014 are Q4-2014, for the quarter ended 30 September 2013 are Q1-2014; for the quarter ended31 December 2013 are Q2-2014 and for the quarter ended 31 March 2014 are Q3-2014. Similar nomenclature is applicable for other years.
(2) 100,00,000 = 100 lakh = 10 million = 1 crore
P&G Health’s ASP is made up of two components – advertisement (ad) and trade incentives (incentive) spends. From FY-2008 (year ended 30 June 2008) until FY-2013, the company’s ASP is split has shifted towards increasing incentive spends – the company’s incentive spend has moved from about 20 per cent of ASP to 44 per cent in FY-2014, with ad spends proportionately moving downwards from 80 per cent in FY-2008 to 56 per cent in FY-2013. This does not mean that the company has been spending lower amount of money towards ad spends, it’s just that with higher budgets, the skew is more towards spending more on trade incentives.
P&G Health’s ASP in FY-2014 at Rs 294.49 crore was just 3.2 per cent more than the Rs 285.27 crore in FY-2013, again, the lowest percentage growth over the last 7 financial years starting FY-2008 until FY-2014.
The company’s TIO in Q4-2014 was down 2.9 per cent to Rs 486.1 crore versus the Rs 500.67 crore in Q3-2014 and was 14.9 per cent more than the Rs 423.08 crore in Q1-2014. P&G Health’s FY-2014 TIO at Rs 205.09 crore was 21.6 per cent more than the Rs 168.68 crore in the preceding financial year. Please refer to Fig 1 below.
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P&G Health’s PAT in Q4-2014 at Rs 89.92 crore (18.5 per cent of TIO) was 11.3 per cent more than the Rs 80.76 crore (16.1 per cent of TIO) in Q3-2014 and was 73.4 per cent more than the Rs 51.87 crore (12.3 per cent of TIO) in Q4-2013.
In FY-2014, PAT at Rs 302.02 crore (14.7 per cent of TIO) was 48.6 per cent more than the Rs 203.22 crore (12 per cent of TIO) in FY-2013.
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P&G Health, in its earnings release says that both its feminine and healthcare businesses continued to deliver double digit growth in a competitive market environment behind superior products, strong initiatives and product portfolio strength. It says further that the launch of Old Spice is delivering in line with its expectations. Among its product portfolio, the company has brands such as Whisper (feminine hygiene) and Vicks (healthcare), and Old Spice.
Brands
Estée Lauder to shed 10,000 jobs as new boss bets on digital shift
The cosmetics giant raises its profit outlook but stays silent on a possible merger with Spain’s Puig, as job cuts deepen and a three-year sales slump weighs on the turnaround
NEW YORK: Stéphane de La Faverie is not done cutting. Estée Lauder announced on Friday that it plans to eliminate as many as 3,000 additional jobs, taking its total redundancy programme to as many as 10,000 roles, up from a previous target of 7,000 announced a year ago. The company, which owns La Mer, The Ordinary, Tom Ford, and Aveda, employs roughly 57,000 people worldwide. The mathematics of what is now being contemplated is stark.
The fresh round of cuts is expected to generate a further $200 million in savings, bringing the total annual savings from the programme to as much as $1.2 billion before taxes. That money, De La Faverie has made clear, will be ploughed back into the turnaround.
A CEO in a hurry
De La Faverie, who took the helm in January 2025, inherited a company that had endured three consecutive years of annual sales declines. His response has been to move fast and cut deep. A significant portion of the latest redundancies reflects his push to reduce headcount at US department stores, long a cornerstone of Estée Lauder’s distribution model but now a channel in structural decline. In their place, he is accelerating the shift toward faster-growing online platforms, including Amazon.com and TikTok Shop, a pivot that is reshaping not just where Estée Lauder sells but how it thinks about its customers.
The numbers are moving in the right direction
Despite the pain, there are signs the medicine is working. Estée Lauder raised its profit outlook for the remainder of the fiscal year, guiding for adjusted earnings per share in the range of $2.35 to $2.45, above analyst estimates and a notable step up from the $2.05 to $2.25 range it had guided for in February. Organic net sales growth is expected to come in at 3 per cent, the company said, at the high end of the range it set out in February.
The share price tells a mixed story. After De La Faverie took charge, the stock surged nearly 60 per cent, buoyed by investor optimism that a longtime company insider could finally arrest the decline. But 2026 has been rougher: the shares have fallen 27 per cent this year, weighed down by disappointing February results and the overhang of unresolved merger talks with Spanish beauty giant Puig Brands SA. The company gave no additional details about those discussions on Friday, leaving the market to guess.
Silence on Puig
The proposed tie-up with Puig remains the most consequential unknown hanging over Estée Lauder. A deal with the Barcelona-based group, which owns brands including Carolina Herrera and Rabanne, would reshape the global luxury beauty landscape. But with nothing new to say and a turnaround still very much in progress, De La Faverie is asking investors to trust the process.
Three years of sales declines, 10,000 job cuts, and a merger that may or may not happen. At Estée Lauder, the overhaul has barely started.
