Strong US dollar hurts sales at consumer giant
THE SURGING strength of the US dollar has taken its toll on Procter and Gamble (P&G) with revenue falling four per cent to $20.2bn (£13.3bn) in the three months ending 31 December, compared to the year before.
The decline in revenue saw the company suffer a 31 per cent fall in net earnings to $2.3bn during the same period, hitting the share price of the NYSE-listed consumer goods giant and sending shares in the company to close down 3.45 per cent.
Company forecasts provided little cheer with 2015 sales earnings expected to drop by five per cent and net earnings by 12 per cent, or at near $1.4bn after tax.
P&G failed to increase unit volume during the quarter, with declines of two per cent in its health care, grooming and personal care categories only being offset by a two per cent increase in its homecare range.
Core earnings per share decreased by eight per cent to $1.06 which was worse than the average forecast by analysts who had expected earnings per share to come in at $1.13.
The company is looking to discontinue or sell off many more of its non-core brands in an effort to streamline its business and focus on around a dozen key categories encompassing 70 to 80 brands.
Chairman and chief executive officer AG Lafley said the outlook for 2015 remains challenging.
“We will continue to offset as much of the currency impact as we can through productivity-driven cost savings. We will continue to invest in our businesses, brands and product innovation, because it is the right thing to do for the mid- and long-term”.