Procter & Gamble Co. said its first-quarter profit rose 5% as the maker of Tide detergent, Pampers diapers and other recognizable brands battles a challenging market for consumer-goods makers.
Organic sales, a closely watched metric that strips out currency moves, acquisitions and divestitures, increased 1%. RBC Capital Markets said the analyst consensus for P&G's organic sales growth was 1.1% in the quarter, though it was expecting 1.4%. P&G's total sales also fell short of the average analyst forecast.
Continue Reading Below
Shares in P&G, up 7.8% over the past year, declined 1.5% to $90.25 in premarket trading.
The results come as activist investor Nelson Peltz narrowly missed obtaining a seat on Procter & Gamble's board last week, according to a preliminary vote tally. At least $60 million was spent on the proxy fight -- which the Trian Partners chief executive says isn't over yet -- making it the priciest fight in U.S. history.
The latest quarterly report may give Mr. Peltz more fuel to continue his criticisms that P&G needs to be more aggressive in taking back market share from rivals and convert costing cuts into profit.
For the first fiscal quarter, P&G's profit rose to $2.85 billion, or $1.06 a share, up from $2.71 billion, or 96 cents a share. Excluding certain restructuring charges, the company earned $1.09 a share. Total sales rose to $16.65 billion from $16.52 billion.
Analysts, on average, were predicting $1.08 a share on $16.89 billion in revenue.
The company said Friday that it continued to expect sales to grow 2% to 3% in the current fiscal year, which ends in June. The company -- which also makes Crest toothpaste and Gillette products -- made that same forecast in July.
P&G's sales growth in the first quarter was helped by segments related to beauty; fabric and home care; and health care. Net sales in the grooming segment, as well as baby, feminine and family care, each fell.
P&G Chief Executive David Taylor had said in the past that the company would focus on accelerating innovation and boosting segments such as its U.S. razors business and diapers business in China. The company has been banking on price increases, as opposed to more volume, to aid growth.
This week, fellow consumer-products company Unilever PLC also reported missed analysts' expectations on sales in its latest quarter. Unilever said it was affected by U.S. growth and cited impact from hurricanes.
Write to Allison Prang at firstname.lastname@example.org
(END) Dow Jones Newswires
October 20, 2017 08:17 ET (12:17 GMT)