Procter & Gamble sales disappoint after prices get shave
Quarterly sales hurt by lower pricing and weak demand for nappies and shaving goods
Procter & Gamble’s net sales rose 2.6 per cent to $16.50 billion in the fiscal fourth quarter. Analysts had forecast sales of $16.54 billion. Photograph: Brendan McDermid/Reuters
Procter & Gamble’s fiscal fourth-quarter sales fell below Wall Street estimates on Tuesday, hurt by lower pricing and weak demand at its units that make Pampers nappies and Gillette shaving products.
Big consumer goods makers are struggling to grow sales as consumer habits evolve, with many shoppers choosing fresher brands or changing the way they groom themselves. P&G and its rivals have also been dogged by surging transportation and commodities costs, particularly for pulp used in nappies and tissue products.
Net sales rose 2.6 per cent to $16.50 billion. Analysts had forecast sales of $16.54 billion.
The company, whose board members include activist investor Nelson Peltz, said cost cuts and higher prices would help it report stronger organic sales and core earnings in the second half of fiscal 2019 than in the first half.
Shares of Procter & Gamble, the world’s second-largest packaged goods company after Nestle SA, were down 0.5 per cent at $79.82.
P&G is rolling out an average 4 per cent increase in Pampers prices in North America, and has begun notifying retailers of an average 5 per cent price rise for Bounty, Charmin and Puffs tissue products.
Higher prices may not sit well with US retailers that have been aggressively cutting prices and tightening inventory levels to keep pace with Amazon. com.
“While P&G announced 4-5 per cent price increases for key US businesses, questions remain whether pricing will stick in the current environment,” Wells Fargo analyst Bonnie Herzog wrote in a note. – Reuters