Procter & Gamble Reports Organic-Sales Growth--Update

By Joshua Jamerson 

Procter & Gamble Co. offered a more upbeat outlook for organic sales growth this year as it reported quarterly organic sales growth across its segments, the first glimpse at its operations since it shed the bulk of its ailing beauty brands.

Shares rose 1.8% to $86.25 in premarket trading Friday.

The consumer-products giant has struggled for years to accelerate sales growth facing slowing demand for staples like fabric softener and increased competition from new smaller & nimbler rivals. The company determined a focus on areas like salon products and designer perfumes distracted from core areas and hurt its growth.

In June 2015, P&G announced it would shed brands such as Wella shampoos, Clairol hair dye and CoverGirl makeup and merge them with Coty Inc. in a complicated deal originally valued at $13 billion. The report Friday marked P&G's first since it unloaded the bulk of the beauty business to Coty; the deal closed last fall. P&G retained brands such as Olay facial moisturizers and Pantene shampoo.

P&G reported net income of $7.88 billion, or $2.88 a share, compared with year-ago earnings of $3.21 billion, or $1.12 a share. On an adjusted basis, excluding gains from the sale, the company said it earned $1.08 a share, slightly above analysts' projections for $1.06 a share.

Sales edged lower to $16.86 billion from $16.92 billion a year ago, less of a drop-off than the $16.77 billion analysts were expecting.

P&G has shown recently it is able to cut costs but had yet to deliver on a promise to meaningfully increase revenue. Investors have been looking for P&G to post improved organic-sales growth, a measure that strips out currency moves, acquisitions and divestments.

The company said organic sales increased 2% driven by a 2% increase in organic shipment volume, as pricing and mix had no net impact on quarterly sales. For the year, the company now expects organic sales growth in a range of 2% to 3% after previously guiding for a 2% target.

--Imani Moise contributed to this article.

Write to Joshua Jamerson at [e-mail]

(END) Dow Jones Newswires

January 20, 2017 08:18 ET (13:18 GMT)

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