Chief executive David S. Taylor said that the company is facing increased competition, putting additional pressure on P&G’s already tight profit margin. “We are operating in a very dynamic environment affecting the cost of operations and consumer demand in our categories and against highly capable competitors,” Taylor said in a statement.
Companies such as Amazon.com are moving into territory where P&G has enjoyed less competition by introducing in-house discount brands, such as Mama Bear for baby goods that can be delivered to a family’s doorstep. (Amazon chief executive Jeffrey P. Bezos owns The Washington Post.) Amazon’s Mama Bear brand diapers in a size 3, for example, will run parents 22 cents per diaper when bought in bulk, or $35.99 for a box of 140. Pampers, on the other hand, currently cost 26 cents per diaper when purchased on Amazon, or 29 cents per diaper at big-box retailer Walmart. The cost for Pampers will go up by about a penny per diaper on average, or about $2 per month for each child in diapers.
P&G did see growth in its beauty segment over the past year, including double-digit gains in sales for skin- and personal-care products such as Olay and premium brand SK-II, reflecting industry-wide growth in beauty and cosmetics. Sales in its shaving-care business, which includes Gillette brand, lagged as net sales in the grooming segment dropped by 3 percent, facing competition from start-ups such as Dollar Shave Club, bought by P&G competitor Unilever in 2016. P&G’s feminine-care business showed modest sales growth over the prior year, attributed to growth of its Always Discreet incontinence pads.