Procter & Gamble Co. struggled to gain sales traction in the latest period and the top line slipped below estimates in the consumer-products giant's second full quarter since shedding the bulk of its beauty business.
The company also cautioned sales could decline this year because of divestitures and currency challenges, and shares slipped 1% to $89.12 premarket.
P&G, the seller of products under brands such as Tide, Head & Shoulders and Gillette, has struggled for years to accelerate sales growth as demand has slowed for its consumer staples and competition has increased from smaller and more nimble rivals.
In June 2015, P&G announced it would shed brands such as Wella shampoos, Clairol hair dye and CoverGirl makeup and merge them with Coty Inc. in a complicated deal originally valued at $13 billion. Wednesday's report was the second since unloading the bulk of the beauty business to Coty.
Chief Executive David Taylor pointed to modest organic sales growth and double-digit core earnings growth amid an environment "characterized by a slowdown in market growth, continued geopolitical disruptions and foreign-exchange challenges."
For the March quarter, P&G reported net income of $2.52 billion, or 93 cents a share, down from year-ago earnings of $2.75 billion, or 97 cents a share. On an adjusted basis, excluding restructuring charges, the company said it earned 96 cents a share, two pennies above the average analyst estimate.
Sales edged lower to $15.61 billion from $15.78 billion a year ago, slightly more of a decline than the $15.73 billion analysts were expecting.
P&G has shown recently it is able to cut costs but had yet to deliver on a promise to meaningfully increase revenue. Investors have been looking for P&G to post improved organic-sales growth, a measure that strips out currency moves, acquisitions and divestments.
The company said organic sales rose 1%, driven by a 1% increase in organic shipment volume, as pricing and it sales mix had no net impact on quarterly sales. Organic sales grew across all segments except for grooming, where lower volume and reduced pricing in shave care led to a 6% drop.
The company backed its guidance for per-share core earnings growth in the mid-single digits and organic sales growth in the range of 2% to 3% for its fiscal 2017 year.
(END) Dow Jones Newswires
April 26, 2017 08:17 ET (12:17 GMT)