P&G snack food sales volumes decreased

We reviewed todays financial release of Procter and Gamble for the October - December quarter for what details on the development of the sales of their savoury snacks (Pringles). Although somewhat hampered by the fact that P&G mostly lumps its savory snacks related figures together with their pet food sales, this is what we learned:

Snacks and Pet Care net sales increased six percent to $835 million for the quarter on a one percent increase in unit volume. Organic sales increased three percent. The carryover impact of pricing to recover higher commodity costs added five percent to net sales. This was partially offset by negative mix impacts of two percent driven by the discontinuation of premium snack products which had higher than segment average selling prices. Favorable foreign exchange contributed two percent to net sales growth.

Volume in Snacks declined low single digits driven by lower merchandising activity in North America and the discontinuation of some premium snack products. Volume in Pet Care increased mid-single digits behind continued success of product initiatives and increased promotional activity. Net earnings increased 56 percent versus the prior year period to $98 million behind higher gross margin resulting from price increases, lower commodity costs and manufacturing cost savings. SG&A as a percentage of net sales increased primarily due to higher marketing spending.

As for the performance of P&G in general:

The Procter &Gamble Company (NYSE: PG) delivered net sales growth of six percent for the October - December quarter to $21.0 billion. Organic sales grew five percent which was at the top of the Company's guidance range. Diluted net earnings per share were $1.49 and diluted net earnings per share from continuing operations were $1.01. Core EPS increased 22 percent to $1.10 for the quarter, above the Company's guidance range, on better than expected sales growth and margin expansion. The Company raised its expectations of fiscal 2010 organic sales growth and Core EPS.