The Only Decline of Johnson & Johnson Falls on Cosmetics Segment
- Chaileedo Press
- Apr 23, 2022
- 3 min read
Johnson & Johnson announced its Q1 2022 earnings report, which achieved $23.426 billion, up 5% year-over-year and net profit was $5.149 billion, down 16.9% year-over-year. Cosmetics, including the consumer health division Q1 revenue of $3.586 billion, down 1.5% year-on-year, is the only Johnson & Johnson performance decline in the quarter.
On April 19, Johnson & Johnson (JNJ.US) announced its Q1 2022 earnings report, which showed that Johnson & Johnson's Q1 revenue was $23.426 billion, up 5% year-over-year and net profit was $5.149 billion, down 16.9% year-over-year.
For the decline in net profit, Johnson & Johnson mentioned that the main reason was the global overcapacity of COVID-19 vaccine and the existence of uncertain demand, so the company stopped the production of vaccines, resulting in the decline of the company's vaccine revenue.
According to the data, Johnson & Johnson has three major divisions: Consumer Health, Pharmaceuticals and Medical Devices.
During the reporting period, cosmetics, including the consumer health division Q1 revenue of $3.586 billion, down 1.5% year-on-year, is the only Johnson & Johnson performance decline in the quarter.
In this regard, Johnson & Johnson said: due to supply chain issues resulting in capacity constraints on goods, can not meet consumer demand in a timely manner, the division's skin health / beauty, oral care, baby care and other businesses has seen a decline and the loss of some market share.
The cosmetics-related businesses in the Consumer Health segment include the skin health/beauty business, oral care business, baby care business, and women's health business, involving brands such as NEUTROGENA, Dr. Ci:Labo, AVEENO, DABAO, CLEAN & CLEAR, and JOHNSON 'S Adult.
According to the earnings report, in the fiscal year 2022 Q1, the skin health/beauty business revenue was $1.012 billion, down 13% year-on-year and oral care business revenue was $366 million, down 12.2% year-on-year and the baby care business was $355 million. The women's health business was $288 million, up 2.6% year-over-year.
Combined with the financial data for Johnson & Johnson's Consumer Health segment between 2019 and 2021, it can be seen that the segment's revenue shifts from growth in 2019 to a downward trend in the first quarter of 2022. While three of the four businesses within the division related to the cosmetics industry (skin health/beauty business, oral care business, and baby care business) all shift from growth to decline in this reporting period, only the women's health business still maintains some level of growth from 2020.
By region, sales in the Asia Pacific and Africa were $4.506 billion, up 3.1% year-over-year.
Finally Joaquin Duato, CEO of Johnson & Johnson, said, "Given the company's healthy financial position, I am confident about future growth."
Indeed, Johnson & Johnson has had negative information exposed in recent years.
In 2018, Johnson & Johnson was awarded $4.69 billion in damages in the Johnson & Johnson talcum powder cancer case, and the truth surfaced that Johnson & Johnson concealed that its products contained carcinogens such as talc and asbestos for more than four decades, sparking global concern about cosmetic safety.
On July 15 (July 14 local time), Johnson & Johnson officially recalled all batches of five NEUTROGENA and AVEENO aerosol sunscreen products to consumers in the U.S. region voluntarily due to internal testing that found samples containing certain levels of benzene.
Meanwhile, on July 16, 2021, NEUTROGENA also issued a recall of two sunscreen spray products on its official website in China: After investigation, two spray-type sunscreen products were available in the Chinese market, NEUTROGENA Light Refreshing Sunscreen Spray SPF 50+ PA ++++ and NEUTROGENA Light Sunscreen Isolation Spray SPF 35. The company decided to voluntarily recall these two products and stop selling them, while the rest of the product line is not affected.
Although NEUTROGENA's sunscreen is not considered hot seller in China, the brand's other products, such as the A-alcohol night cream, are among the A-alcohol category's hot selling, making NEUTROGENA highly visible in China. Leveraging its hot sales momentum in China's e-commerce platforms, NEUTROGENA became one of Johnson & Johnson's brands with annual sales of more than $1 billion by 2020.
As for the incident of the test containing carcinogenic substances, although some experts said that the use of these products involved in the probability of no adverse health consequences, but out of caution for the products have been sold through retailers nationwide in the United States, Johnson & Johnson decided to recall all sunscreen products in the United States and two Chinese products that may contain benzene, and urged relevant consumers to stop using them.
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