P&G boosts sales with big brands, new products

CINCINNATI (AP) – Procter & Gamble Co. is slowly luring back budget-battered US consumers to its big brands, while attracting new buyers around the globe by getting more products into emerging markets such as India and China.

The maker of Pantene shampoo and Pampers diapers said Wedneday that revenue grew nearly two percent on high volumes in its latest quarter, and forecast growing sales for the rest of the year.

More spending on advertising – stretched by social-media hits such as the Old Spice “Smell Like a Man” commercials - and innovation at high and low price ranges are helping P&G fight frugal shoppers’ trading down to cheaper store brands and reach more of the world’s newer consumers.

P&G reported Tuesday that net income was $3.08 billion, or $1.02 per share, down from $3.3 billion, or $1.06 a year ago. Sales rose nearly two percent to $20.1 billion. Analysts surveyed by Thomson Reuters expected, on average, $1 per share on revenue of $20.2 billion for the July-September quarter.

“We aren’t going to make any excuses for the macroenvironment like the one we’re in,” Bob McDonald, CEO and chairman, told reporters on a conference call. “We see it as an opportunity to continue to invest and grow market share profitably.”

McDonald said sales of the new Gillette Fusion ProGlide, introduced in June, were strong despite its 15 percent higher price. They said it is handily outselling the previous Fusion and rival Schick. Olay skin cream and other beauty products oriented toward women buyers also sold more, although higher-end salon and prestige brands lagged.

Meanwhile, the world’s largest consumer products maker is introducing low-income consumers to major brands with new products such as cheap Gillette shavers and versions of Tide detergent in India. Jon Moeller, chief financial officer, said the new Gillette Guard razor is designed to draw Indian users with a price of roughly 33 cents, and refill blades for 11 cents, while offering safety as well as value.

P&G is also expanding sales of Pampers in China and Brazil, has brought Swiffer dusters to Israel, and said more emerging consumers are snacking on Pringles chips.

P&G blamed the year-to-year net income difference mainly on the absence of its pharmaceutical business, sold last October for $3.1 billion to Warner Chilcott PLC as part of the company’s strategy to focus on products with the best growth and profit prospects.

Organic sales, a key measure that excludes the impacts of acquisitions, divestitures and currency changes, rose four percent in the quarter. The company projects them to rise three to five percent in the current quarter and four to six percent for the full year.