P&G, Colgate top expectations; P&G shares rise
Procter & Gamble Co blew past profit forecasts on Thursday as sales started to rebound, pleasing investors who were eager to see whether the new chief executive’s efforts to win back shoppers were paying off.
P&G’s pantry of name-brand household products has been pressured for months, as shoppers opted for less expensive store-branded diapers and detergent rather than buying the company’s Pampers and Tide.
In the latest quarter, total sales came in slightly ahead of Wall Street expectations and the company raised its full-year sales view.
Fragrances and even some Gillette razors still saw sales fall, but a pricey SK-II line of skin care products posted double-digit volume growth as new items lured women overseas.
“Our focus this fiscal year is profitable share growth, and I underline profitable share growth,” Bob McDonald, who took over the CEO role in July, said during a conference call.
Shares of P&G, the world’s largest household products maker, were up 3.7 percent after jumping nearly 5 percent earlier in the session.
“It looks like with new leadership that the company is getting things turned around a little quicker than what we expected,” said Edward Jones analyst Jack Russo. “What this stock really needed was improvement on the sales front and we’re starting to see that now.”
Colgate-Palmolive Co, which is about one-fifth the size of P&G, saw its shares rise a more modest 0 payday advance online.9 percent even though its profit and sales topped expectations.
Colgate, maker of toothpaste and toothbrushes, gets punished a little bit because they are a consistent performer, Russo said.
Through Wednesday, P&G shares had dropped 7.4 percent this year, while Colgate had jumped 13.3 percent higher.
OPTIMISM TEMPERED BY UNEMPLOYMENT
P&G posted a profit 7 cents per share ahead of analysts’ forecasts and said it had modestly higher expectations for industry growth.
The big question is what happens to market growth and how sustainable it is, said P&G Chief Financial Officer Jon Moeller. He said the high unemployment rate is tempering P&G’s enthusiasm and that commodity costs are increasing again.
Sales fell 6 percent at P&G, with declines in every category and the volume of goods sold down 3 percent. A quarter earlier, sales fell 11 percent and volume fell 5 percent.
P&G’s organic sales, which exclude the impact of currency fluctuations, acquisitions and divestitures, rose 2 percent, well ahead of its expectation for such sales to be flat to down 3 percent and the fourth-quarter’s 1 percent decline.
Filed under: economics by Specialist