While overall net sales fell by 1% to $21.7 billion compared to the previous year, the company’s organic sales—adjusted to exclude the impacts of foreign exchange, acquisitions, and divestitures—rose by 2%, according to the company’s press statement.
The Q1 results also showed that the grooming segment experienced solid gains, emphasizing the need for product differentiation and adapting to regional market trends in the cosmetics and personal care sectors.
Beauty segment performance
P&G’s beauty division faced a 2% decline in organic sales during the quarter, with varying results across its different subcategories. Hair care, one of the core pillars of the beauty segment, saw modest gains in North America, Europe, and Latin America.
These gains were attributed to favorable product mix and increasing demand for premium products, reflecting the ongoing trend of consumers opting for high-quality, performance-driven hair care solutions. However, these improvements were offset by declining volumes in Greater China, a region where market challenges continue to weigh on growth.
Personal care products within the beauty segment performed better, with organic sales growing by high single digits. This was largely due to innovation-led volume growth and a favorable mix of premium offerings.
According to P&G’s media statement, this segment’s success underscores the importance of continuous product innovation in driving consumer preference, particularly in competitive markets where differentiation is critical.
Skin care, on the other hand, faced substantial challenges, with sales declining by more than 20%. The sharp decline was attributed to lower sales of the super-premium SK-II brand, a flagship product in P&G’s skin care portfolio.
The performance of SK-II reflects broader market trends, as consumers in key regions, such as Greater China, have shifted their purchasing behavior, affecting demand for luxury skin care products. P&G’s experience with SK-II signals that companies in the beauty industry may need to reassess their strategies in super-premium categories, especially in regions facing economic slowdowns.
Grooming segment growth
While the beauty segment faced headwinds, P&G’s grooming business delivered stronger results, with organic sales increasing by 3% compared to the previous year. Innovation continued to be a key driver of growth in this segment, particularly in premium grooming products, where higher consumer demand for cutting-edge technology and performance was evident.
For manufacturers and suppliers in the personal care space, this growth signals the sustained importance of product differentiation, particularly through innovation in performance and user experience.
However, P&G also noted that unfavorable geographic mix slightly tempered the segment’s overall gains. Despite these challenges, the company remains optimistic about future growth in the grooming segment. The company’s focus on leveraging new technologies to create superior grooming products is expected to support continued momentum.
Strategic focus and industry implications
Jon Moeller, P&G’s Chairman, President, and CEO, highlighted the company’s long-term strategy for sustainable growth in the face of market challenges. “We remain committed to our integrated growth strategy of a focused product portfolio of daily use categories where performance drives brand choice, superiority — across product performance, packaging, brand communication, retail execution and consumer and customer value — productivity, constructive disruption and an agile and accountable organization,” Moeller said in P&G’s media statement.
This strategy aligns well with current trends in the beauty and grooming sectors, where innovation, sustainability, and premium product positioning are becoming increasingly important.
For cosmetics and personal care product manufacturers and suppliers, P&G’s first-quarter results offer valuable takeaways. Despite the volatility in certain regions and product categories, P&G’s performance highlights the potential for growth in areas where innovation and product differentiation are prioritized.
The beauty segment’s mixed performance, particularly the challenges faced by the super-premium SK-II brand, underscores the importance of adapting to regional market conditions and shifting consumer preferences. Meanwhile, the steady growth in the grooming segment reflects the continued consumer interest in high-performance, technologically advanced personal care products.
Outlook for fiscal 2025
P&G remains optimistic about its fiscal 2025 outlook, maintaining its guidance for organic sales growth between 3% and 5% and total sales growth of 2% to 4%. The company expects to overcome challenges posed by foreign exchange fluctuations and divestitures, while continuing to deliver innovation-driven products across its key categories.
For the beauty and grooming sectors, P&G’s results reinforce the importance of focusing on product innovation, premium positioning, and adapting to regional market dynamics to drive sustainable growth. As the industry continues to evolve, manufacturers and suppliers can look to P&G’s strategy for insights on how to navigate complex market conditions while maintaining a strong focus on product excellence and consumer value.
