By Austen Hufford and Sharon Terlep 

Procter & Gamble Co. reported weak sales growth in its latest quarter as the company continues to face challenges in its shaving business and other categories that are being disrupted by more nimble competitors.

The company's third-quarter report comes after it announced the purchase of Merck KGaA's consumer-health business in a $4.2 billion deal that combines vitamins and food supplements with its group of over-the-counter medicines. The Wall Street Journal first reported the companies were nearing a deal, which is one of the biggest acquisitions in recent years for the Cincinnati consumer-products giant.

Slow sales growth in key markets continued as the company reported both a challenging environment for its products as well as falling sales in the unit that houses its shaving products. The company announced rare across-the-board price cuts on its Gillette razors last year, which it hopes will help it better compete with cheaper alternatives like Dollar Shave Club, now owned by Unilever PLC.

Organic sales, a closely watched metric that strips out currency moves, acquisitions and divestitures, rose 1% in its third quarter, driven by organic volume growth and more customers buying premium-priced beauty products. The Gillette price cuts continued to weigh on sales.

Sales of the top household goods products rose 0.4% in the 12-week period ended March 24 compared with the same time a year ago, according to Nielsen data provided by Wells Fargo.

P&G said in prepared remarks Thursday that it had major businesses in several "difficult" markets and that many businesses it was operating are being disrupted and transformed.

Activist investor Nelson Peltz assumed his seat on the P&G board March 1, after settling a monthslong proxy fight with P&G. Investors will look for signs of Mr. Peltz's influence on the company. While fighting for a seat on the board, Mr. Peltz argued that P&G's "suffocating bureaucracy" needed restructuring and that the company should overhaul research and development and look to startups to bolster its product portfolio.

"We will change at an even faster rate," Chief Executive David Taylor said Thursday.

In all for the quarter, the company reported a profit of $2.51 billion, or 95 cents a share, compared with $2.52 billion, or 93 cents a share, a year before.

Adjusted earnings per share, which excludes noncore restructuring charges and temporary U.S. tax impacts, came in at $1, above the 98 cents a share forecast by Thomson Reuters.

Total sales rose 4.3% to $16.28 billion, compared with the $16.21 that was expected by analysts. Much of the increase was due to foreign exchange fluctuations.

P&G shares rose 0.7% to $77.99 in premarket trading.

Write to Austen Hufford at austen.hufford@wsj.com and Sharon Terlep at sharon.terlep@wsj.com

(END) Dow Jones Newswires

April 19, 2018 08:11 ET (12:11 GMT)