P&G sales and revenue slide as consumers tighten spend
Sales for the period ending 31 March dropped to $18.42bn, from $18.9bn a year earlier, although the company pointed out that organic sales were up one percent, reflecting a six percent positive impact from pricing and mix, helping to offset the 5 percent fall in sales volumes.
Sales volumes were most noticeably reduced in the Central and Eastern European market as well as the Europe/Middle East/Africa market, where the company said that price hikes were implemented to maintain momentum.
Foreign currency the big problem
The biggest impact on the sales was foreign currency, which negatively affected the results to the tune of 9 percent, as the US dollar continued to trade at higher exchange rates against most international currencies.
Recent cost saving measures as well as higher pricing also helped to reduce the effects of the lower sales revenues, which meant net profit for the quarter fell 4 percent, from $2.81bn to $2.71bn.
Breaking the sales down according to business segments, the results showed that some of the most disappointing figures came from the company’s beauty and personal care divisions.
Beauty sales hit hard
In particular, sales for its beauty category, its second biggest division, fell by nine percent to $4.3bn, a figure that was particularly hit by softness in prestige fragrances in the Europe/Middle East/Africa market, which led overall sales for this segment to fall by double figures.
The company also noted that retail hair care sales were down in low single figures, while sales of professional hair care products were down in double digit figures, attributable to a worldwide softness in this market segment.
Sales for the company’s grooming division were down 16 percent to $1.7bn, a figure which the company said was caused by an unfavorable product mix , further exacerbated by a 12 percent unfavorable impact from foreign exchange rates.
Baby care and family got off lightest
Of all the company’s personal care divisions, the least impacted was its baby care and family care business, which saw sales fall by just 2 percent to $3.5bn during the quarter. This figure was attributed to a 3 percent rise in organic sales, which was in turn hit by a 9 percent negative impact from currency exchange.
The company's healthcare division was hit by a 12 percent fall in sales to $3.2bn, while household sales for fabric care and home care were down six percent to $5.4bn
The disappointing results led the company to reduce its full year forecast, underlining the fact that it expects slower sales worldwide to continue throughout its fourth quarter.
Considering this, the company expects organic sales to grow by 2 – 3 percent for the year, while net sales will be down by 2 – 4 percent, due to a five percent negative impact from unfavorable currency exchange rates.
