Procter & Gamble Hurt by Strong Dollar

Procter & Gamble Co. reported Thursday that sales fell 7.6% in the March quarter because of the strong dollar, which also pushed down volume.

The consumer products giant called the widespread weakening of foreign currencies against the U.S. dollar unprecedented and said it led to declines in all of its main business segments. In the latest quarter, foreign exchange reduced sales by eight percentage points.

The blow from currency is an outgrowth of P&G's successful expansion into overseas markets over the years.

To offset the impact, the maker of Gillette razors and Pampers diapers is relying on cost cuts including reduced head count and cutbacks in spending on marketing. That will include shifting more of advertising to digital channels, which already account for more than 30% of the total.

The company also is raising prices and shifting sources of its products, but those moves take time to have a pronounced effect on the bottom line.

Overall, the company reported third-quarter earnings of $2.15 billion, or 75 cents a share, down from $2.61 billion, or 90 cents a share, a year earlier. Excluding restructuring costs and other items, earnings were 92 cents a share.

Revenue fell to $18.14 billion from $19.64 billion.

Analysts had expected per-share earnings of 92 cents and revenue of $18.49 billion, according to Thomson Reuters.

Total unit volume was down 2% in the quarter, with volume down 4% in its beauty and personal care, though up 1% in the grooming and health-care units. The fabric segment posted a 1% decrease.

Shares have been down about 10% this year through Wednesday's close.

Write to Angela Chen at [e-mail]

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