P&G profits drop despite two per cent sales increase

The company achieved two per cent growth in net sales to US$20.1 billion and four per cent organic sales growth.

P&G, which owns brands including Gillette razors, Pampers baby products and Ariel laundry detergents, reported an eight per cent 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 six per cent to US$709 million.

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 two to four per cent increase in sales for the next quarter and a three to five per cent increase for its financial year.

This article was first published on marketingmagazine.co.uk