P&G sales growth shy of forecasts | Progresiv
Procter & Gamble Co posted quarterly sales that missed analysts’ expectations for the first time in five quarters, hurt by weakness in baby and feminine care products such as Pampers diapers and Tampax tampons. 
A slowing global birthrate has hit P&G and competitors like Huggies diapers maker Kimberly-Clark, particularly in China and the United States. To boost sales, both companies have invested in higher-priced premium products.
Premium baby-care sales in China are up 20-30% so there are still opportunities despite the slow birthrate, Chief Operating Officer Jon Moeller said on a post-earnings call.
U.S. sales growth for diapers and baby care was about flat from a year ago and innovation in the market remains competitive, Moeller said.
The company said net sales rose 4.6% to 18.24 billion dollars, which missed the average analyst estimate of 18.37 billion dollars, according to IBES data from Refinitiv.
Jefferies analyst Kevin Grundy said Wall Street expectations were built on the company’s momentum in the past five quarters, but the modest second-quarter results are likely to be met with disappointment.
“Good quarter, but high bar,” he wrote in a note to clients.
Sales of P&G’s baby and feminine products rose just 1% to 4.58 billion dollars, while sales of fabric and home care products rose 4% to 5.79 billion dollars, both missing estimates. The company said inventory levels in Japan fell following a buildup before the nation’s sales tax hike in October.
Sales at the grooming business, which makes Gillette razors, rose 2% to 1.65 billion dollars, also below estimates. The company took an 8 billion dollars charge last year related to the unit, which faces competition from smaller rivals Harry’s and Dollar Shave Club.
P&G has been investing heavily to develop new products across all categories, improve packaging and marketing as it tries to appeal to younger consumers and fights competition from Unilever, Reckitt-Benckiser and local upstarts.
The company raised its fiscal 2020 forecast for core earnings per share growth to between 8% and 11% from a prior range of a rise of 5%-10%. (www.reuters.com)
