Last month the company released its quarterly figures for the period ending June 30 and net sales dropped by 11 percent, although much of this was attributed to currency effects.
Disappointing sales dragged profits down 18 percent to reach $2.47bn leading P&G chairman A.G. Lafley to refer to fiscal 2009 and in particular the fourth quarter as one of the most difficult macroeconomic environments the company has faced in decades.
However, P&G has now announced that it expects at least organic sales to recover by the end of the year, during the October to December quarter, but it did not predict currency effects.
Net sales are expected to return to positive growth figures in 2010 and the company has upped its original earnings per share estimate to between $3.99 and $4.12 as this includes one off earnings from the recent sale of the pharmaceutical business.
Inflection point in sales
P&G’s chief financial officer Jon Moeller said the actions the company had taken were beginning to have their desired positive effect.
“We clearly see that we are approaching an inflection point in P&G’s organic sales trends,” he said.
“The innovations we are launching and the investments we are making are having an impact in the market. In addition, comparisons to prior year results will get easier as we move into the second quarter,” he added.
President and CEO Bob McDonald called the company’s actions ‘urgent’.
“We acted with urgency to protect the structural economics of our business last year, and we are acting with urgency this year to deliver profitable market share growth,” he said.
Things will not look up overnight, however, and predictions for the current quarter are not looking as positive.
P&G expects an organic sales decline (between 0 and minus 3 percent) which will be exacerbated by currency effects to the tune of 7 percent, leading to a sales decline of 10 percent.