PG Procter and Gamble Co

Procter & Gamble Co. Chief Executive A.G. Lafley acknowledged responsibility for the consumer-products company's weak performance and promised better results in the coming years under the leadership of his successor.

"We are accountable and the buck stops with me," Mr. Lafley said Tuesday morning at P&G's annual shareholders' meeting at the company's headquarters in Cincinnati. He was responding to a shareholder who had criticized P&G's management for flip-flopping on its strategy over the years and for its recent stock-price underperformance relative to its peers. So far this year, P&G shares are down 19%.

Mr. Lafley will hand over the CEO responsibilities to David Taylor on Nov. 1, while staying on as executive chairman to help pull the world's largest consumer products company out of a deep slump.

P&G has struggled to accelerate sales growth in an era of more frugal consumers since the 2008-2009 recession, and in its financial year that ended in June, the company's performance was particularly weak. Sales barely grew excluding the impact of foreign-currency swings relative to the U.S. dollar, though P&G noted that the 65 brands it is intending to keep did better than those it is in the process of shedding. For the year, P&G reported net income of $7 billion, down 40% from a year earlier, and sales of $76.3 billion for the fiscal year.

When Mr. Lafley previously ran P&G from 2000 to 2009, the company more than doubled in size and market value by acquiring brands including Gillette razors, Wella shampoos and Duracell batteries. Over the past year and a half, P&G has put in place plans to shed around 100 of its 165 brands, including Wella and Duracell, to focus its resources on growing core brands such as Pantene shampoo, Pampers diapers and Tide detergent. The company is also several years into a deep cost-cutting and restructuring plan.

Currency weakness, meanwhile, reduced P&G's profit by $1.5 billion in the year ended June. The company doesn't use financial contracts to hedge its foreign-currency exposure and instead tries to mitigate the impact by sourcing materials and manufacturing locally in the markets where it sells products, Chief Financial Officer Jon Moeller said Tuesday.

The company reports results for the recent quarter next week. Analysts are expecting P&G to post an 11% drop in earnings, according to Thomson Reuters.

Mr. Taylor was present at Tuesday's meeting but didn't take the stage. Mr. Lafley said his successor played "a central role" in developing P&G's strategy over the past few months and Mr. Taylor's track record shows he delivers results.

"We are in the middle of a big transformation, and we think we are halfway through it," Mr. Lafley said at the meeting.

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(END) Dow Jones Newswires

October 13, 2015 14:55 ET (18:55 GMT)

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