Procter & Gamble Reports Organic-Sales Growth--Update
January 20 2017 - 8:33AM
Dow Jones News
By Joshua Jamerson
Procter & Gamble Co. offered a more upbeat outlook for
organic sales growth this year as it reported quarterly organic
sales growth across its segments, the first glimpse at its
operations since it shed the bulk of its ailing beauty brands.
Shares rose 1.8% to $86.25 in premarket trading Friday.
The consumer-products giant has struggled for years to
accelerate sales growth facing slowing demand for staples like
fabric softener and increased competition from new smaller &
nimbler rivals. The company determined a focus on areas like salon
products and designer perfumes distracted from core areas and hurt
its growth.
In June 2015, P&G announced it would shed brands such as
Wella shampoos, Clairol hair dye and CoverGirl makeup and merge
them with Coty Inc. in a complicated deal originally valued at $13
billion. The report Friday marked P&G's first since it unloaded
the bulk of the beauty business to Coty; the deal closed last fall.
P&G retained brands such as Olay facial moisturizers and
Pantene shampoo.
P&G reported net income of $7.88 billion, or $2.88 a share,
compared with year-ago earnings of $3.21 billion, or $1.12 a share.
On an adjusted basis, excluding gains from the sale, the company
said it earned $1.08 a share, slightly above analysts' projections
for $1.06 a share.
Sales edged lower to $16.86 billion from $16.92 billion a year
ago, less of a drop-off than the $16.77 billion analysts were
expecting.
P&G has shown recently it is able to cut costs but had yet
to deliver on a promise to meaningfully increase revenue. Investors
have been looking for P&G to post improved organic-sales
growth, a measure that strips out currency moves, acquisitions and
divestments.
The company said organic sales increased 2% driven by a 2%
increase in organic shipment volume, as pricing and mix had no net
impact on quarterly sales. For the year, the company now expects
organic sales growth in a range of 2% to 3% after previously
guiding for a 2% target.
--Imani Moise contributed to this article.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
January 20, 2017 08:18 ET (13:18 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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