Procter & Gamble reported a drop in quarterly earnings Tuesday following a mixed sales performance in its consumer products portfolio, with the shaving business continuing to struggle. P&G, whose products include Crest toothpaste and Tide detergent, said net income in its fiscal fourth-quarter was $1.9 billion, down 14.6 percent from the year-ago period. Revenues rose 2.6 percent to $16.5 billion, slightly below analyst expectations.
P&G enjoyed higher organic sales - which exclude the effect of currency changes - in its beauty segment, thanks in part to a good performance of the SK-II skin product and a premium Oil of Olay product. Organic sales were also higher in fabric and home care, and in health care. But P&G encountered another quarter of sales slippage in grooming care, where its Gillette line has struggled from the rise of online competitors and as more men grow beards.
P&G enacted price cuts last year to try to raise US grooming sales, a move which has boosted volume and market share growth of its products in the region. But P&G said those measures only go so far given fashion trends. "What offsets that is the continual shift to less shaving," said chief financial officer Jon Moeller in a briefing with reporters.
Excluding the effect of currency changes, sales in grooming fell three percent. P&G said net income was also dented by restructuring costs and expenses connected to paying off debt early. "We are operating in a very dynamic environment affecting the cost of operations and consumer demand in our categories and against highly capable competitors," said chief executive David Taylor. "We will accelerate change in the organization and culture to meet these challenges." P&G projected organic sales growth of two to three percent in fiscal 2019, with the stronger dollar and the effect of acquisitions expected to dent sales by two percent. Shares fell 1.4 percent to $79.16.
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