Procter&Gamble, a global consumer goods giant, announced on Tuesday that its high-end skincare brand SK-II saw a 34% decrease in sales in Greater China in the second quarter ending in December, citing Japan's nuclear wastewater discharge as the main reason.
Last August, Japan began releasing a large amount of treated radioactive wastewater from the Fukushima nuclear power plant, which was hit by an earthquake and tsunami more than 10 years ago. These sewage were discharged into the Pacific Ocean, causing strong opposition from neighboring countries of Japan, including China.
Due to concerns about nuclear radiation pollution, Chinese consumers have boycotted Japanese brands including Procter&Gamble SK-II. Procter&Gamble and other companies have issued statements stating that their products are safe to use in an attempt to alleviate consumer concerns.
SK-II's official official account said at that time that SK-II's "Fairy Water" factory and production line were located on the shore of Japan's largest lake, Lake Biwa, which was also the only source of water quality for the brand's products. There was no other production channel in the world.
In addition, the reasons for SK-II's struggling sales include high product prices and poor tourism retail.
However, despite the impact on business in the previous quarter, Procter&Gamble executives have stated that sales of SK-II have begun to improve.
"Our consumer research indicates that sentiment around the SK-II brand is improving, and we expect a sustained improvement in the second half of the year," Procter&Gamble CFO Andre Schulten said during the company's earnings conference call.
Earnings exceeding expectations boost stock prices
Procter&Gamble was founded in 1837 and has a history of nearly 190 years. It owns a series of well-known brands such as OLAY, SK-II, Crest, HiFi, and Shufujia.
Overall, Procter&Gamble's revenue for the second quarter of the 2024 fiscal year increased by 3% from the same period last year to $21.44 billion, slightly lower than FactSet's expected $21.476 billion.
The net profit for the quarter was 3.468 billion US dollars, or 1.40 US dollars per share, compared to 3.933 billion US dollars, or 1.59 US dollars per share, in the same period last year; The adjusted earnings per share for the quarter were $1.84, higher than FactSet's expected $1.70.
Although Procter&Gamble's quarterly sales were lower than expected, its quarterly profit exceeded Wall Street's expectations due to rising pricing, and the stock closed up more than 4% on Tuesday.