Lafley Downplays US Recession Fears
CINCINATTI: World numero uno advertiser Procter & Gamble has reported higher quarterly earnings as the continuing decline in the US dollar spurs an increase in overseas sales.
Profits at the consumer goods giant matched analysts' estimates on sales of Pampers diapers in India and Fusion razors in Russia.
P&G, whose brands also include Tide washing powder and Folgers coffee, reported fiscal Q1 net profit up 14% to $3.08 billion ((€2.13bn; £1.48bn), while sales rose 7.5% to $20.2bn, compared with the year earlier period.
The company said it was seeing some slowdown in the US market as consumers rein-in spending, the result of high energy costs and the housing slump. In addition, it warned it would raise prices on a number of products to offset commodity costs.
Sales in the beauty business were disappointing, with organic growth of 4%. However, expansion in the higher-margin beauty segment is a key part of P&G's long-term strategy. The fabric and home-care business and baby and family care groups led organic growth with 7% each.
P&G's triple-hatted chairman/president/ceo Alan G Lafley apparently has a blind spot. In a post-results discussion he told the Financial Times: "No one is predicting recession right now," as if to prove he doesn't read that newspaper (or any other).
Whilst conceding there had been some slowdown in P&G's US sales growth, Lafley insisted that demand for its products remained buoyant. And even if there was a recession? "We do relatively better in a recession ... it is not clear that there is going to be one."
Data sourced from AdAge.com and Financial Times; additional content by WARC staff