Beards Trim P&G’s Sales as ‘Movember’ Fuels Hairy Look
(Corrects name of JPMorgan Chase in third paragraph.)
Procter & Gamble Co. (PG) says a growing preference for shaggy styles is trimming razor sales.
Beards are showing up all over, from the facial hair favored by Brooklyn hipsters to the solidarity beards sported by the Boston Red Sox baseball team, which in 2013 went from last place in their division to World Series champions. P&G even called out Movember, when participants grow mustaches to raise money for prostate cancer research. The event cut into grooming sales last quarter, Chief Financial Officer Jon Moeller said yesterday on an earnings call.
P&G’s grooming business, which includes shaving cream, razor blades and deodorant, generated $2.12 billion in revenue during the quarter ended Dec. 31 and accounted for 9.5 percent of the company’s sales. Though the division’s sales rose 3 percent, excluding currency effects, John Faucher, an analyst at JPMorgan Chase & Co. in New York, said in a Jan. 13 note that sales of non-disposable razors and blades fell 7.8 percent in the 12 weeks through Dec. 21.
The reason: “Increased interest in facial hair,” he said.
Last month, a group called the Gotham City Beard Alliance, which bills itself as promoting “tolerance and acceptance of all facial hair,” held a beard and mustache competition in downtown Manhattan, with contests for “freestyle,” sideburns and starter mustaches. Even the heavily bearded cast of “Duck Dynasty” are fashionable these days.
Guys are hearkening back to a more “rugged, masculine” look, said David Wu, an analyst at Telsey Advisory Group in New York. Facial hair is becoming more accepted in the workplace, he said, in industries ranging from fashion to finance. While Wu is clean-shaven, he says most of his male friends sport facial hair.
Alex Mecum, a real-estate salesman in downtown Manhattan, wears “permastubble” that he maintains with a trimmer. Most of the fashion-conscious men he knows have some growth.
“I would definitely say it’s the look,” said Mecum, 37, adding that it’s not just the callow. “I’ve noticed older men too now.”
Mecum won a mustache contest in a Washington, D.C., bar after growing a “righteous horseshoe” for what he calls his “Octobeard” observance, though in cutting-edge Brooklyn, with keener competition, “I would have been trounced,” he said.
His prizes included a mustache-shaped pillow and a painting of Ron Swanson, the mustachioed character on the television sitcom “Parks and Recreation” played by Nick Offerman.
P&G and competitor Schick, which is owned by Energizer Holdings Inc. (ENR), also have to contend with upstart razor sellers such as Dollar Shave Club, which sells blade subscriptions for as little as $1 a month. Moeller said yesterday the challengers are small and aren’t having a major impact on P&G’s sales.
More men are shaving their chests and backs these days, which could give blades a new lift. Coming soon from the world’s largest consumer-products company: a body razor.
The company has enlisted model Kate Upton and actresses Hannah Simone and Genesis Rodriguez to plug its 3-in-1 ProGlide Styler and issued a “Body Shaving 101” information sheet, which notes that “men often lack guidance when it comes to shaving below the neck.”
Mecum said “people care more about growing out the upstairs and trimming back the downstairs.” Yet he doesn’t plan to buy the product. His trimmer works just fine, he said.
P&G said that second-quarter net income fell 16 percent to $3.43 billion, or $1.18 a share, from $4.06 billion, or $1.39, a year earlier. Excluding some items, profit was $1.21 a share, exceeding the $1.20 average of 20 analysts’ estimates compiled by Bloomberg.
The shares rose 1.2 percent to $79.18 yesterday at the close in New York and advanced 20 percent last year, compared with a 30 percent increase for the Standard & Poor’s 500 Index.
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