Novartis takes hit from private label
This article was originally published in The Tan Sheet
Executive Summary
A shift in U.S. consumer spending toward private label products stymied Novartis Consumer Healthcare's sales in its fiscal 2008 second quarter, the Swiss company says July 17. However, "emerging markets and strategic brands helped OTC offset lower sales in the U.S" so the division still pulled in $1.5 billion in net sales, a 15 percent increase in the U.S., or a 3 percent increase in local currency, compared to the year-ago period, Novartis says. Despite a tough quarter for consumer sales, net sales for the firm grew ahead of expectations to $10.7 billion - a 14 percent increase in U.S. dollars, or 5 percent in local currencies, primarily attributed to Novartis' pharmaceutical division overcoming the impact of 2007 challenges in U.S. vaccines and diagnostics, the firm says. Novartis' bad news comes as private labeler Perrigo reports expansion plans and expects a boost from consumers using less expensive store brand products (1"The Tan Sheet" July 14, 2008, p. 3)...
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