The firm’s executives also pointed the finger at anti-Japanese sentiment in addition to China’s slow recovery.
Japan began releasing treated radioactive water from its nuclear power plant Fukushima last year. Fukushima was struck by a massive tsunami in 2011.
Despite the UN’s guarantee of the safety of the seafood, China objected to the move and prohibited any imports of seafood from Japan.
Although most scientists concur that the treated water will have little effect on the environment, consumers in China boycotted Japanese companies, including P&G’s SK-II, as misinformation stoked mistrust and anxiety.
Additionally, hundreds of hostile phone calls were placed to Fukushima businesses, and rocks were thrown at Japanese schools.
However, P&G executives stated that sales of SK-II have already started to increase in recent months.
On the company’s earnings conference call, chief financial officer Andre Schulten was quoted as saying, “Our consumer research indicates SK-II brand sentiment is improving, and we expect to see sequential improvement in the back half.”
SK-II and other Japanese brands have experienced boycotts in China previously.
A wave of anti-Japanese demonstrations in China in 2012 over a territorial dispute caused production at Japanese automakers Toyota, Honda, and Nissan to stop, and their showrooms were set upon.
Other Japanese companies affected included the electronics company Sony, fast fashion brand Uniqlo and the shopping chain stores Aeon.
Although China and Taiwan both claim the islands, which are known as Senkaku in Japan and Diaoyu in China, they are governed by Japan.
During the earnings call, P&G CEO Jon Moeller mentioned that SK-II’s sales had previously suffered from tensions, but the brand has always recovered.
A one-time expense associated with its Gillette business caused the company to lower its annual profit forecast, which resulted in mixed overall earnings for the company.
However, despite their high cost, consumers continued to have a strong demand for the company’s everyday-use products, which were primarily in the home-care and grooming sectors.
