COVID 'comparisons': J&J Q1 2021 consumer health sales dip amidst overall earnings rise

21-Apr-2021 - Last updated on 21-Apr-2021 at 09:51 GMT

Johnson & Johnson's total consumer health division posted a sales decline for Q1 2021 but its baby care category proved particularly strong with worldwide growth of 9.5% largely driven by LATAM and APAC regions (Getty Images)

Personal care major Johnson & Johnson (J&J) has reported a global sales rise for the first quarter of 2021, fuelled by pharmaceuticals and medical devices, but its consumer health division saw overall sales decline despite strength in oral and baby care segments.

Yesterday, Johnson & Johnson (J&J) reported €18.5bn (US$22.3bn) in sales for its first quarter (Q1) of 2021, up 7.9% on the previous year. Net earnings for the quarter were up 6.9%. However, the company’s consumer health division – which included its oral care and skin health portfolio – reported a sales dip of 2.3%, largely due to declines in over-the-counter medicines. Sales in the overall division had been up slightly in Q4 2020 by contrast.

Oral care, baby care and skin health strong despite COVID-19 2020 ‘pantry loading’ impact

Johnson & Johnson said the sales decline in consumer health was “primarily driven by negative prior year comparisons related to the COVID-19 pantry loading in Q1 2020”.

Speaking to investors on the Q1 earnings call, Chris DelOrefice, vice president of investor relations at Johnson & Johnson, said if these increased 2020 COVID-19 demands were excluded, the consumer health business unit would have in fact grown slightly.

“Consumers continue to focus on products related to personal health and hygiene, including oral care which grew 4.5% from continued growth of Listerine mouthwash due to category growth and strong promotions,” DelOrefice said.

A closer look at the division, also showed gains made in the Johnson’s baby care franchise where growth was 9.5% worldwide, with particularly strong growth in Latin America and Asia-Pacific. The Aveeno baby care brand also experienced e-commerce growth worldwide. Sales in the skin health and beauty franchise in the consumer health division were also up 2.8%, thanks to new product innovations and strength in e-commerce for the Neutrogena and Aveeno brands outside of the US.

Post pandemic strength – J&J has ‘confidence’ moving forward

Alex Gorsky, chairman and CEO, of Johnson & Johnson, described the Q1 earnings as “strong results”, acknowledging they had been driven primarily by “above market growth” in pharmaceuticals and “continued recovery” in medical devices.

Joe Wolk, executive vice president and CFO of Johnson & Johnson, said that compared to Q1 2020, the company was in a much stronger position.

“We are stronger as a business than before the pandemic, and our first quarter 2021 results give us even more confidence in our ability to continue delivering compelling performance in the future,” Wolk told investors on the earnings call.