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The Procter & Gamble Company reported first quarter net sales increased 2% to $20.1 billion behind broad-based volume growth. Organic sales, which exclude the impact of acquisitions, divestitures and foreign exchange, grew four percent. The company, according to its press release, continued to deliver broad-based volume and market share growth, with all regions growing.
"Our first quarter was a good start to the fiscal year. We maintained our top-line momentum and delivered profitable market share growth," said Bob McDonald, chairman of the board, president and CEO, P&G. "We are confident that our purpose-inspired growth strategy—to touch and improve the lives of more consumers in more parts of the world, more completely—will continue to drive growth and create value for shareholders. While the macroeconomic environment remains challenging, the solid first quarter results demonstrate that our strategy is working."
Volume increased 8%, with growth in all major geographic regions and five of six business segments. Unit volume was up double digits in developing regions and mid-single digits in developed regions. Key initiatives for the quarter included the North American launches of Crest Pro-Health Clinical and brand restages of Pantene in Asia.
Beauty net sales were in line with the prior year period at $4.9 billion on unit volume growth of four percent. Organic sales grew 3%. Volume in developing regions increased double digits, while volume in developed regions declined low single digits. Mix reduced net sales by 2% due to disproportionate growth in developing regions, which have lower than segment average selling prices, and declines in the premium-priced categories of prestige products and salon professional. Unfavorable foreign exchange lowered net sales growth by two percent.
Volume in retail hair care increased mid-single digits behind double-digit growth in developing regions led by Pantene and Head & Shoulders. Volume in female beauty grew mid-single digits primarily behind double-digit growth of Olay, Safeguard and Venus. Volume in salon professional declined high single digits mainly due to the exit of non-strategic businesses. Volume in prestige products was down high single digits behind lower shipments in Western Europe and the divestiture of minor brands. Net earnings increased seven percent to $829 million driven by higher operating margin due to lower overhead spending, reduced foreign currency exchange costs and manufacturing cost savings, partially offset by higher marketing spending.