P&G sales rise on higher prices across all divisions

Procter & Gamble pushed up prices in all five of its main divisions in its fiscal fourth quarter, the
latest sign of how the US consumer packaged goods company has recovered since activist investor Nelson Peltz took aim at its “chronic under performance”.

The company behind household brands such as Pampers nappies, Ariel detergents and Patent hair care generated organic sales growth, a metric that strips out the impact of
foreign exchange, acquisitions and divestitures, of 7 per cent in the quarter.

Wall Street cheered the figures even though the company slipped to a loss of $5.24bn in the fourth quarter, or $2.12 per share, driven by an $8bn after-tax goodwill and intangible assets charge in its Gillette shave care business.

Shares of the company were up more than 4 per cent to $121.19 in pre-market trading. P&G said the impairment was due primarily to long-term currency devaluations, although it also recognised the business had been hit by “market contraction of blades and razors, primarily
in developed markets”.

P&G and its big rivals have been under pressure from changing consumer tastes and intensifying competition. In grooming, P&G’s Gillette has lost ground to the likes of Dollar Shave Club and Harry’s. The rise of retailers’ own brands, such as Costco’s Kirkland, has added to the difficulties.

Jon Moeller, chief financial officer, urged investors to look past the non-cash write down and said the fortunes of the business were improving. “This is a business that both on a value and volume basis is growing in a majority of countries in the world,” he said.