[ad_1]
A flawless stay
Procter & Gamble Co. had a long history of funk, recording the strongest quarterly sales growth in five years, driven by continued global demand for bathroom essentials such as Head & Shoulders Shampoo and Razors Gillette.
These gains were a sign that the consumer products giant could enter a more robust period of growth after a multi-year struggle to adapt to growing competition, rising costs and the consumer trend to adopt smaller brands.
P & G
of the
PG 8.80%
the misfortunes led to the most expensive battle in the history of the board and the promises of dramatic changes by the leaders, but there was little sign that these changes were materializing.
Investors applauded the results Friday by sending P & G shares up 8.3% to $ 87 – the highest percentage gain in 10 years. Stocks are still down over the year, having missed the broader rally in the stock markets.
The Cincinnati-based company announced increased sales in most of its categories, including razors, health care detergents and laundry detergents. P & G executives said growth came from increased demand in the US and abroad, not from the company's recent decision to raise prices for certain items.
Despite a good start to the fiscal year, leaders have been trying to squeeze expectations and meet their full-year expectations that sales of organic products would increase by 2% to 3%. Jon Moeller, P & G's chief financial officer, said he would abstain from talking about a "decisive quarter."
The company is "definitely not sitting here today to declare victory," Moeller said during a conference call with analysts. "We have a lot of work and volatility."
P & G said organic sales, a closely monitored measure that excludes currency movements, acquisitions and divestments, rose 4% in the first fiscal quarter. Cosmetics – with brands such as Pantene, Olay and Old Spice – fueled gains, rising 7%. Overall, sales of organic products increased in nine of the company's 10 global categories, Moeller said in an interview.
"Beauty has had a very good quarter, but history is not beauty," he said. "If you look at the difference between the previous quarters and this quarter, the most decisive difference was simply the number of companies growing, reflecting the implementation of our strategy."
The company has been working on productivity, making better packaging and creating more products that solve consumer problems and are convenient, "said Mr. Moeller. The company's fast-growing products during the quarter include the detergent Tide Pods and Always Discreet, an adult diaper for women with sensitive bladders launched in 2014, he said.
Moeller said the company had raised prices in some emerging markets to offset currency fluctuations, but prices were broadly neutral in September. Shipment volumes increased 3% over the previous year.
The company now estimates that its overall turnover should decline by 2% for the full year, due to exchange rate difficulties, compared to the previous forecast stagnation of 1%.
In recent quarters, the company's organic sales have generally increased by 2% or less. They increased by 1% during the year ended June 30th, below the company's target of 2% to 3%.
After more than a year of trying to fight the weak demand by lowering prices, P & G has recently changed course, saying it would cost more for its brands Pampers, Bounty, Charmin and Puffs. The increases, which the company believes would come into effect later this year or early in 2019, could have a greater impact on prices and demand given the size and influence of P & G. stated that prices were generally neutral during the quarter.
P & G recorded a 4% organic sales increase in its long-term care business, in which Gillette lost market share to online newcomers such as Dollar Shave Club. In the United States, grooming sales rose 10% in the quarter, although Moeller warned that the company would continue to face challenges in this sector. The baby products sector, which includes the Pampers and Luvs diapers, was the only sector that experienced a decline in organic sales.
Consumer product manufacturers got a boost this week
Unilever
PLC and
Nestle
HER
Inflation in many markets has allowed them to charge more for their products, which has allowed these companies to increase their sales in the last quarter. In recent quarters, many consumer goods manufacturers struggled to raise prices due to low inflation, but rising commodity prices and the strong US dollar have changed the game.
According to P & G, earnings rose 12 percent to $ 3.2 billion, or 1.22 cents per share, in the first quarter, ending September 30. Core earnings were $ 1.12 per share, compared to $ 1.09 per share sought by Refinitiv analysts.
Net sales increased 0.2% to $ 16.69 billion.
The company's earnings were affected by unfavorable exchange rate fluctuations due to the strengthening of the US dollar, which weighed on sales of 3%.
P & G said price increases to offset currency and commodity pressures would begin to take effect later in the second fiscal quarter and resume in the second half of the year. The costs and currency issues "will persist and are likely to worsen" as the company enters the second quarter, Moeller said.
Price increases could have a negative impact on overall consumption, Moeller said. "We will simply have to adapt as we learn," he said.
The company also maintained its key earnings per share growth forecast of 3% to 8% for fiscal 2019, although Mr. Moeller stated that the company is currently not in the upper half of this range. The outlook includes an estimated currency impact of $ 1.3 billion, as well as higher commodity costs, such as crude oil, as well as higher transportation costs.
Write to Aisha Al-Muslim at [email protected]
Source link
