P&G posts surprise sales drop on slowing demand for personal care products
Adds CFO comment in paragraph 6 and investor comments in paragraphs 4 and 9
By Ananya Mariam Rajesh and Jessica DiNapoli
Oct 18 (Reuters) -Tide maker Procter & Gamble PG.N reported a surprise drop in quarterly sales for the second time in a row, as price-conscious consumers in its major markets, the United States and China, switched to cheaper brands.
An uncertain U.S. economy - P&G's growth engine - has pushed customers mainly from the lower-income group to rivals who are offering discounts, and cheaper private-label brands.
P&G's organic sales in North America grew 4% in the first quarter, compared with a 7% rise seen a year earlier.
"The consumers aren't feeling good out there after the bout of inflation we've had over the recent years, so we need an improvement in sentiment I think for a company like this to do better," said Don Nesbitt, senior portfolio manager at F/m Investments, which has a stake in P&G.
Additionally, a prolonged property crisis and rising youth unemployment have resulted in a grim demand environment in China that impacted sales and volumes of P&G in the country.
"China, as we had expected, continues to be softer from a consumption standpoint ... the market continues to be weak and will be weak...for a number of quarters to come," CFO Andre Schulten said, adding that P&G, however, has a renewed plan for product launches and category expansions in the country.
P&G, which has been reeling in years of steep price hikes with some promotions, reported a 1% rise in average prices across its product categories, and a 1% gain in overall organic volumes in the reported quarter.
Higher prices helped P&G report adjusted profit per share of $1.93, above analysts' average estimate of $1.90, according to data compiled by LSEG.
Brian Jacobsen, chief economist at Annex Wealth Management, said in recent years a relatively stronger consumer tilted the balance towards U.S. growth being the main driver, but now, "that is trickier due to the competitive landscape in the US, especially with the consumer revolting against price hikes."
Shares of P&G were down nearly 1% in volatile premarket trading after the company reported a 0.6% fall in first-quarter net sales to $21.74 billion, compared with analysts' estimates of a 0.2% rise to $21.91 billion.
P&G maintained its annual organic sales growth forecast of a 3% to 5% rise and core earnings per share expectation of $6.91 to $7.05.
Rival packaged food manufacturer Nestle NESN.S on Thursday cut its annual sales forecast, noting the demand environment would continue to remain weak and flagged pressure from weaker economies such as Latin America.
Analysts also expect P&G to see a drag to its volumes from slowing demand in Latin America, China and the Middle East.
In some Muslim majority countries, people have called for boycotting P&G products because of its connections to Israel.
Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Shinjini Ganguli
免责声明: XM Group仅提供在线交易平台的执行服务和访问权限，并允许个人查看和/或使用网站或网站所提供的内容，但无意进行任何更改或扩展，也不会更改或扩展其服务和访问权限。所有访问和使用权限，将受下列条款与条例约束：(i) 条款与条例；(ii) 风险提示；以及(iii) 完整免责声明。请注意，网站所提供的所有讯息，仅限一般资讯用途。此外，XM所有在线交易平台的内容并不构成，也不能被用于任何未经授权的金融市场交易邀约和/或邀请。金融市场交易对于您的投资资本含有重大风险。
所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。
本网站上由XM和第三方供应商所提供的所有内容，包括意见、新闻、研究、分析、价格、其他资讯和第三方网站链接，皆保持不变，并作为一般市场评论所提供，而非投资性建议。所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为适用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。请确保您已阅读并完全理解，XM非独立投资研究提示和风险提示相关资讯，更多详情请点击 这里。
