Procter & Gamble sales slide in Q1, plans more savings

Procter & Gamble has seen its third-quarter sales dip slightly, marking the 13th straight quarter that they have fallen.  P&G also said it plans to save another 7 billion dollars over the next five years, in addition to the 10 billion dollars target it unveiled last year.

For the three months to end-March, net sales were down 1% to 15.6 billion dollars, although they grew by 1% on an organic basis, even as volumes grew by 1% on the latter basis.

The Beauty business saw sales decline by 2% (+1% organic) on flat volumes; Grooming recorded a 6% drop on flat volumes; while Fabric & Homecare and Baby, Feminine & Family Care units both saw sales edge down 1% (+1% organic) even as volumes grew 1%.  The strongest performer was the Health Care unit, where sales grew by 4% (+6% organic) and volumes were up by the same amount.

P&G said it saw increased sales in segments such as Oral Care, Skin & Personal Care, and Feminine Care, but this was offset by weakness in Baby Care, Home Care, and Shave Care.  CEO David Taylor added: “The third quarter macro environment was characterised by a slowdown in market growth, continued geopolitical disruptions and foreign exchange challenges”.

The group reiterated its full-year forecast for organic sales to grow by 2%-3%, with net sales expected to be flat to down 1%, and adjusted earnings per share to grow at a mid-single digit rate.

Meanwhile, the group said it plans to reduce 2 billion dollars in marketing spending over the next five years, as part of its overall savings programme. CFO Jon Moeller said it will save around 1 billion dollars from media rates and eliminating media supply chain waste, 500 million dollars from reduced agency fees and ad production costs, and 500 million dollars in in-store costs, direct-to-consumer and sampling.

It also plans to save 7 billion dollars in material, packaging, production and transportations costs. (www.kamcity.com)