Deutsche Bank: Update On Consumer Sector

Deutsche Bank says, “With high unemployment and uncertain macro, organic top-line growth remains challenging with near-term signs pointing to tepid category growth. The industry is investing aggressively to drive volume growth via innovation, higher spending, emerging markets and M&A. With low singles category growth and zero sum share battles, forward outlook remains cautious. Maintain market perform with Avon, Nu Skin, Newell, Clorox and Energizer top picks.” “Volumes increased 0.8% and price mix increased 0.1% for the four-week period ending August 8, 2010, We saw dollar sales declines in certain large categories such as toilet tissue, facial tissue, paper towels, batteries, liquid laundry detergent, hair care, hand & body lotion, dry dog food, cat litter, air freshener, cleaning tools and kitchen storage. Volume growth remains critical as spending continues to increase and new products come to market,” the analysts mention. Deutsche Bank adds, “L’Oreal sales rose 4.8% with share gains in facial make up, eye makeup, lipstick, shampoo and Suntan lotion categories while Unilever sales increased 4.4% with share gains in non deodorant bar soap, deodorants and hair care categories. Beiersdorf sales improved 3.1% YoY with the company gaining share in facial anti ageing, shaving cream and baby soaps. Energizer and Procter & Gamble sales increased 1.1% and 0.6% primarily due to new launches. Clorox, Colgate and Kimberly Clark sales decreased 3.2%, 2.4% and 1.4% respectively. J&J sales continued to suffer due to product recalls.”