Profits fall at maker of Ariel detergent and Gillette razors
Slowdown in market growth, geopolitical uncertainty and a stronger dollar blamed
P&G has said it plans to save as much as $10 billion in costs over the next five years
Procter & Gamble, the maker of Ariel detergent and Gillette razors, reported an 8.3 per cent fall in third-quarter profit, citing a slowdown in market growth, geopolitical uncertainty and a stronger dollar.
Net income attributable to the Cincinnati, Ohio-based company declined to $2.52 billion, or 93 cents per share, in the three months ended March 31st, from $2.75 billion, or 97 cents per share, a year earlier.
Excluding items, P&G earned 96 cents, beating the average analyst estimate of 94 cents, according to Thomson Reuters I/B/E/S.
The consumer goods giant, whose iconic brands include Tide, Pampers, Head-and-Shoulders and Vicks, said net sales fell about 1 per cent to $15.61 billion - the thirteenth straight quarter of declines. Analysts had been looking for $15.73 billion.
P&G’s quarterly sales have fallen for more than three years due to the company cutting its brand portfolio.
The company has been selling off unprofitable brands and focusing on core brands such as Tide and Pampers to revive sluggish sales. It sold 41 of its brands, including Clairol and Wella, to Coty in a $12.5 billion deal in October.
P&G, which traces its roots to a family-run candle and soap business in 1837, maintained expectations of a mid-single digit rise in full-year adjusted earnings per share growth, and a 2-3 per cent increase in organic sales growth.
The company’s stock, which has jumped 10.6 per cent in the past year, was down 0.7 per cent in premarket trading.
P&G has said it plans to save as much as $10 billion in costs over the next five years, and use a chunk of these savings to improve packaging, research and development, and sales coverage.