Procter & Gamble Co.’s (NYSE: PG) sales missed Wall Street estimates for the fourth quarter on Tuesday due to lower pricing and weak demand for its diaper and shaving products.
Net sales rose 2.6 percent to $16.50 billion. Analysts had forecast sales of $16.54 billion. Shares of Procter & Gamble, the world’s second-largest packaged goods company, were down 0.5 percent at $79.82.
The company said cost cuts and higher prices would help it report stronger organic sales and core earnings in the second half of fiscal 2019 than in the first half.
In order to claw back market share lost to upstarts such as Dollar Shave Club, P&G cut prices on products in its grooming business by 3 percent during the quarter. Sales in the unit fell 1 percent to $1.65 billion, while volumes dropped 1 percent.
Revenue fell 2 percent at P&G’s Baby, Feminine & Family Care business - its second-biggest contributor to revenue - amid lower demand in the Middle East, Africa and Latin America.
Net income attributable to the company fell to USD 1.89 Billion, or 72 cents per share, in the fourth quarter ended June 30. Excluding items, P&G earned 94 cents per share, ahead of analysts’ estimates of 90 cents.
P&G is rolling out an average 4-percent increase in Pampers prices in North America, and has begun notifying retailers of an average 5-percent price rise for Bounty, Charmin and Puffs tissue products.
“While P&G announced 4-5 percent price increases for key U.S. businesses, questions remain whether pricing will stick in the current environment,” Wells Fargo analyst Bonnie Herzog wrote in a note.
For fiscal 2019, P&G said it sees core earnings per share growth of 3 percent to 8 percent, or USD 4.45 at the midpoint. Analysts were expecting USD 4.39 a share.