P&G credits price hikes, marketing for better-than-expected Q4

Procter & Gamble announced a 4% increase in net sales to $17.1 billion during the fourth quarter of fiscal year 2019, while annual sales grew a marginal 1% to $67.7 billion—a stronger-than-expected performance.

The FMCG giant attributed growth to both pushing up prices across its five main divisions during the quarter and its award-winning advertising.

However, P&G took a hit with the $8 billion write-down of its Gillette shaving business due to changing consumer buying habits, resulting in a $5.24 billion net loss (down 377% year on year) in the three months ending 30 June. This also impacted full-year profit, which fell 60% to $3.9 billion.

During a call to investors, president and chief executive David Scott Taylor singled out P&G's advertising.

He discussed how the company "starts with understanding our consumers", their needs and wants, before creating advertising that makes them "think, laugh, cry and—of course—buy". He also referenced the 17 Cannes Lions that P&G won in June.

"At that event, we announced a series of creative partnerships that reinvent advertising, that merge the worlds of advertising with other worlds, such as music, journalism and technology," he said, referencing chief marketing officer Marc Pritchard's words at Cannes.

Taylor also discussed how P&G's marketing model was shifting away from defining consumers by "generic demographics" and moving towards a model encompassing "more than 350 precise, smart audiences, like first-time moms or millennial professionals… to reach the right people at the right time" with its advertising.

P&G announced recently that it would not be following Unilever's move to stop working with individual agencies in favour of only partnering holding companies.