In early morning trading, share prices rose by 2.4% by 10.30am EST, reflecting the fact that restructuring and cost saving measures seem to have put the company back on track, after a protracted period of declining revenues.
Revenues for the quarter fell by 9% to $16.9bn, reflecting the negative impact of currency translations against the strong US dollar. In organic terms, revenues were up 2%, reflecting underlying growth and the significant impact of currency translations.
Likewise, the increase in sales and savings from restructuring also positively impacted profits, with net income up to $3.2bn, compared to $2.4bn in the corresponding period last year.
Welcomed organic sales growth
The organic growth will be a welcome relief for P&G executives, as underlying sales otheriwise remained negative throughout 2015.
“We are encouraged by our return to organic sales growth in the quarter,” said president and chief executive officer David Taylor.
“With the top-line improvement and continued cost reduction, we delivered solid core operating income and EPS growth in the face of significant macro-economic and geopolitical headwinds.”
Those geopolitical headwinds also included the reconsolidation of the company’s Venezuela operations in the light of the economic crisis in that country, which impacted results by an estimated 3% during the quarter.
Grooming sales lead the way
On a category basis, sales were propped up by the grooming division, which saw revenues increase by 3% during the period, mainly on account on growth in shaving products and for the Braun brand.
In the beauty segment sales were up by 1%, which the company said was driven by organic sales increases in Personal Care and the super-premium SK-II skin care brand, but were also partially offset by organic sales declines of the Olay brand.
With respect to the global performance, the revenues were marked by a slowdown in the developing markets, which was further impacted by currency devaluations in Russia, Mexico and Brazil.
Looking ahead to the rest of 2016, the company said it was sticking to earlier forecasts, with all-in sales for the year expected to be down in the high single digit figures on account of global economic headwinds and currency translations.