Procter & Gamble Profit Rises; Increases Sales of Staples
October 25 2016 - 11:10AM
Dow Jones News
By Sharon Terlep and Anne Steele
Procter & Gamble Co. increased sales of staples from laundry
detergent to toothpaste in its most recent quarter, sending shares
higher despite a warning that growth will be spotty in the months
ahead.
The maker of Gillette razors and Pampers diapers on Tuesday
posted an unexpected rise in profit in the latest quarter and
reported organic sales -- a closely watched metric that strips out
currency moves, acquisitions and divestments -- grew 3%, the
biggest increase is more than a year.
"We're pleased with the progress we're making, but there is
still more work to do to get back to the levels of balanced top-
and bottom-line growth and cash generation," Chief Executive David
Taylor said. He pointed to organic sales growth across all product
categories as well as strong cost savings.
Shares of the company were up about 4.5% in morning trading to
$87.85.
P&G -- which has struggled for years to accelerate sales
growth and has underperformed smaller, nimbler rivals -- has been
slashing costs and commanding higher prices. The results come at a
time when consumer products companies are grappling with
uncertainty in emerging markets, currency swings, and rising
commodity prices.
P&G Chief Financial Officer Jon Moeller cautioned that the
sales bump doesn't change the company's forecast that organic sales
will grow just 2% for the fiscal year that ends next June.
"We continue to face a relatively slow-growth, volatile world,"
Mr. Moeller said. "Progress does not come in a straight line."
All five of P&G's segments recorded core volume improvement
-- 2% in beauty, 3% in grooming, 5% in health care, 4% in fabric
and home care and 4% in baby, feminine and family care.
Growth in health care was driven largely by sales of Oral-B
electric toothbrushes. Sales improved in the U.S. and China,
P&G's two biggest markets, while the company struggled in the
United Kingdom.
Overall pricing remained flat while volume improved 2%.
Excluding acquisitions and divestitures, core volume rose 3%.
In all for the latest quarter, P&G reported a 4.2% increase
in profit to $2.71 billion from a year ago. Revenue was essentially
flat at $16.5 billion.
The company backed its 2017 forecast for per-share earnings
growth in the mid-single digits from fiscal 2016 and sales growth
of about 1%.
Write to Sharon Terlep at sharon.terlep@wsj.com and Anne Steele
at Anne.Steele@wsj.com
(END) Dow Jones Newswires
October 25, 2016 11:55 ET (15:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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