Procter & Gamble is seeing encouraging signs in China, but a full recovery is still a ways off, executives said Wednesday as the consumer products giant reported solid earnings.
P&G, whose brands include Tide detergent and Charmin toilet paper, saw improvement in China in the just-finished quarter in sales of SK-II, a premium skin care product.
Chief executive Jon Moeller also pointed to an uptick in the number of Chinese travelers to South Korea and Japan, as an indication of "more confidence and a willingness to spend" among some in the population.
But Moeller noted that SK-II is "very premium-priced product" and "the broad swath of society is still not confident and is still struggling," he told analysts on a conference call.
The comments came as P&G reported profits of $4.6 billion (£3.74bn) in its fiscal second quarter, up 34 per cent on revenues of $21.9bn, up 2 per cent.
P&G also confirmed its earnings forecast for fiscal 2025, a year in which it projects sales growth of two to four percent.
Executives highlighted product launches including a whole-body deodorant spray and a new advanced power toothbrush as elements that would sustain sales growth.
P&G experienced a 3 per cent drop in organic sales in its Greater China division.
Although still shrinking, chief financial officer Andre Schulten described the performance as "a solid step forward" compared with the 15 per cent decline in the prior quarter.
While "underlining market conditions remain soft," Schulten said "we are trending back toward growth in Greater China."
Sales of SK-II, which is manufactured in Japan, have been hampered in recent quarters in China due to anti-Japan sentiment in the country.
But Moeller, citing fewer negative social media mentions in China, described the climate as improving, saying "the whole dynamic of Japanese brand sentiment, I think, is easing."