Strong dollar leaves shortfall in P&G revenues

Net revenue for the period was $18.1bn, which represented a decrease of 8% compared to the corresponding period last year, a figure that was negatively impacted from currency translations by 8%, with a further impact of 1% from brand divestures.

The underlying results were more positive though, with organic sales, which do not take into account the impact of currency translations, growing by 1%.

Net income fell from $2.61bn in the same period last year, to $2.15bn.

Results were below analyst estimates​

“Our third quarter earnings results were largely in-line with what we had expected,”​ said chairman, president, and chief executive officer A.G. Lafley.

Lafley went on to describe the gains in organic sales and constant currency core EPS growth in the double-digits, but analysts were generally of the opinon that the net earnings were less than they had forecast.

Analysts polled by Thomson Reuters had on average estimated that sales revenues for the quarter would come in at the $18.49bn, leaving a considerable short fall against the actual figure.

“This quarter the productivity progress was offset by foreign exchange. As we have done before, we’ll offset foreign exchange over time through a combination of pricing, mix enhancement and cost reduction,”​ Lafley added.

By category​

Sales fell sharpest in the beauty, hair and personal care business division – the company’s largest. Organic sales fell by 3%, while volume fell by 4%, which offset higher pricing. Net sales were down 11%.

The picture looked much brighter in the grooming division, where organic sales rose by 9% on the back of higher pricing for razors and blades across all regions. But the gains were heavily impacted by currency translations, with net sales down 3%.

In the baby, feminine and family care division, organic sales increased 2% with gains coming from pricing and an improved mix in baby care. Net sales were down 6%.

Organic sales momentum forecast to continue​

Looking ahead to the full fiscal year, the company said it believes that organic sales will continue to grow in the low single digit figures, highlighting the stronger underlying condition of the business.

However, currency headwinds are expected to prevail, with net sales expected to be down by 5 – 7% overall on account of negative currency translations at 6 – 7%.