Proctor & Gamble CEO A.G. Lafley made progress cutting costs from the largest consumer products business in the world during its fiscal third quarter. However, reviving growth in sales has not come as easy.
The Pampers Diapers and Tide detergent maker posted its profit for the quarter that topped estimates of analysts, which was helped by a drop of 5.1% in general, administrative and selling costs.
However, sales dropped slightly missing analyst’s expectations due to declines in P&G’s grooming and beauty businesses. A strong dollar also reduced the value of revenues generated aboard.
Since Lafley returned last year to P&G, he has looked to increase its productivity through the reduction of expenses, while creating at the same time, new products to boost revenue and increase market share. Lafley is also evaluating the portfolio at P&G and agreed in early April to sell the majority of its operation in pet food.
Net income during the quarter that ended on March 31 was up 1.7% to over $2.61 billion equal to 90 cents per share, from last year’s $2.57 billion equal to 88 cents per share.
P&G, based in Cincinnati, Ohio, said that excluding certain items, its profit was $1.04 per share. Wall Street analysts estimated that profits would be $1.02 per share.
On the news, P&G dropped by 0.7% on Wall Street in early trading. The stock has dropped by 0.2% since the start of 2014, while there has been an advance of 1.7% in the S&P 500 Index.
Sales dropped by 0.2% to end the quarter at $20.6 billion. Analysts had estimated sales to be $20.7 billion. Net sales were lower in the baby, healthcare, grooming, beauty, family-care and feminine business units.
P&G revenue, for its homecare unit, was up by 2% during the three months, helped by the 6% increase in the volume of sales. General, administrative and selling costs all dropped by 5.1% for the quarter.
P&G also reiterated its profit growth forecast of up to 5% for its fiscal 2014, which excludes certain items.
Lafley, who led the business the first time between 2000 and 2009, replaced former CEO Bob McDonald in 2013. His return followed a period where P&G lost some market share in certain categories and lagged behind competitors in its sales growth.
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