By Angela Chen
Procter & Gamble Co. gave weak guidance for its new fiscal
year and said sales in the latest quarter dropped more than
expected, hurt by currency effects.
Shares dropped 4.1% in early trading to $77.35.
For the year ending in 2016, P&G said it expects earnings to
be in a range of "slightly below" last year's $3.77 a share to "up
mid-single digits." Analysts, meanwhile, had called for earnings of
$4.18 a share.
P&G also said it sees foreign exchange cutting into overall
sales by 4 to 5 percentage points, and it forecast organic sales in
line with last year's results to up low-single digits.
The consumer products giant is in the middle of a transition. At
the beginning of the month, it said it would carve off brands
including Wella shampoos, Clairol hair dye and CoverGirl makeup and
merge them with Coty Inc. in a complicated $13 billion deal.
Then, it reported that Chief Executive A.G. Lafley will be
stepping down. He will be succeeded by 35-year company veteran
David Taylor, who will take over as CEO on Nov. 1, with Mr. Lafley
shifting to the role of executive chairman.
In the latest quarter, total unit volume was down 1%, with
volume down 4% in its beauty and personal care segment, down 3% in
grooming, and up 1% in the fabric segment.
Organic sales were flat, as a three percentage point benefit
from pricing and mix was offset by lower shipment volume.
Overall, the company reported earnings of $521 million, or 18
cents a share, down from $2.58 billion, or 89 cents a share, a year
earlier.
Excluding certain items, earnings were $1 a share. The company
took a more than $2 billion write-down on an accounting change for
its Venezuelan operations.
Revenue fell to $17.79 billion from $19.6 billion.
Analysts had expected per-share earnings of 95 cents and revenue
of $17.98 billion, according to Thomson Reuters.
Write to Angela Chen at angela.chen@wsj.com
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