P&G profits drop despite 2% sales increase

Procter & Gamble: Cat Deeley stars in Pantene swoosh campaign
Procter & Gamble: Cat Deeley stars in Pantene swoosh campaign

Procter & Gamble, the world's largest consumer goods company, has suffered a 6.8% year-on-year drop in net earnings to $3.08bn in its first financial quarter.

The company achieved 2% growth in net sales to $20.1bn and 4% organic sales growth.

P&G, which owns brands including Gillette razors, Pampers baby products and Ariel laundry detergents, reported an 8% rise in the volume of products sold in the quarter from a year earlier.

The company said that it has "continued to deliver broad-based volume and market share growth". Market share increased in all geographic regions versus the prior year, and was equal or higher in 13 of the top 17 countries and for 17 of P&G's 23 billion-dollar brands.

Profitability decreased due to higher commodity costs and increased marketing spend, which the company did not quantify.

Five of its six business sectors achieved organic sales growth, while its petcare and snacks division was the only division to report a sales decrease, down 6% to $709m.

In a statement released with the report, Bob McDonald, P&G chairman of the board and chief executive, said: "Our first quarter was a good start to the fiscal year. We maintained our top-line momentum and delivered profitable market share growth,"

"We are confident that our purpose-inspired growth strategy - to touch and improve the lives of more consumers in more parts of the world, more completely - will continue to drive growth and create value for shareholders.

"While the macroeconomic environment remains challenging, the solid first-quarter results demonstrate that our strategy is working."

P&G predicts a 2-4% increase in sales for the next quarter and a 3-5% increase for its financial year.

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