Procter & Gamble's Profit Rises, But Sales Fall Short of Views
October 20 2017 - 8:32AM
Dow Jones News
By Allison Prang
Procter & Gamble Co. said its first-quarter profit rose 5%
as the maker of Tide detergent, Pampers diapers and other
recognizable brands battles a challenging market for consumer-goods
makers.
Organic sales, a closely watched metric that strips out currency
moves, acquisitions and divestitures, increased 1%. RBC Capital
Markets said the analyst consensus for P&G's organic sales
growth was 1.1% in the quarter, though it was expecting 1.4%.
P&G's total sales also fell short of the average analyst
forecast.
Shares in P&G, up 7.8% over the past year, declined 1.5% to
$90.25 in premarket trading.
The results come as activist investor Nelson Peltz narrowly
missed obtaining a seat on Procter & Gamble's board last week,
according to a preliminary vote tally. At least $60 million was
spent on the proxy fight -- which the Trian Partners chief
executive says isn't over yet -- making it the priciest fight in
U.S. history.
The latest quarterly report may give Mr. Peltz more fuel to
continue his criticisms that P&G needs to be more aggressive in
taking back market share from rivals and convert costing cuts into
profit.
For the first fiscal quarter, P&G's profit rose to $2.85
billion, or $1.06 a share, up from $2.71 billion, or 96 cents a
share. Excluding certain restructuring charges, the company earned
$1.09 a share. Total sales rose to $16.65 billion from $16.52
billion.
Analysts, on average, were predicting $1.08 a share on $16.89
billion in revenue.
The company said Friday that it continued to expect sales to
grow 2% to 3% in the current fiscal year, which ends in June. The
company -- which also makes Crest toothpaste and Gillette products
-- made that same forecast in July.
P&G's sales growth in the first quarter was helped by
segments related to beauty; fabric and home care; and health care.
Net sales in the grooming segment, as well as baby, feminine and
family care, each fell.
P&G Chief Executive David Taylor had said in the past that
the company would focus on accelerating innovation and boosting
segments such as its U.S. razors business and diapers business in
China. The company has been banking on price increases, as opposed
to more volume, to aid growth.
This week, fellow consumer-products company Unilever PLC also
reported missed analysts' expectations on sales in its latest
quarter. Unilever said it was affected by U.S. growth and cited
impact from hurricanes.
Write to Allison Prang at allison.prang@wsj.com
(END) Dow Jones Newswires
October 20, 2017 08:17 ET (12:17 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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