“We delivered broad-based organic sales growth, with all of our business segments growing, in a difficult macroeconomic and competitive environment,” says chairman of the board, president and CEO Bob McDonald. “We are making good progress against our productivity and cost savings program and improving core operating profit growth as we continue to execute our innovation and portfolio expansion plans. Looking ahead, we expect further acceleration in core operating profit growth in the fourth quarter driven by top-line growth, more favorable cost comparisons and productivity improvements.”
Baby Care and Family Care net sales increased 5% to $4.2 billion on unit volume growth of 3%. Organic sales increased 6%. Pricing increased net sales by 5%. Product and geographic mix reduced net sales by 2%. Foreign exchange reduced net sales by 1%. Baby Care volume increased low-single digits behind double digit growth in developing markets driven by innovation across the portfolio, distribution expansion and market size growth. This was partially offset by a mid-single digit decline in developed markets primarily due to market contraction. Volume in Family Care increased low-single digits due to Bounty and Charmin initiative activity. Net earnings increased 9% to $573 million due to sales growth and operating margin expansion. Operating margin expanded mainly due to a higher gross margin and a reduction in SG&A spending as a percentage of sales. Gross margin increased driven by price increases and manufacturing cost savings, partially offset by higher commodity costs.