Source: AFP
Procter & Gamble reported higher earnings on Friday, citing strong demand in the United States and several European markets that offset weakness elsewhere due to tensions in the Middle East and poor performance in China.
P&G — the consumer products giant that makes Tide detergent, Bounty paper towels and Gillette razors, among many others — had flat volume in the just-ended quarter but a 3% rise in price that contributed to a slight increase in overall sales.
Chief Financial Officer Andre Schulten described consumption as “very strong” in the United States and leading European markets.
But it said sales in the Middle East were being pressured by conflict in the region, while sales in China were down 10 percent, excluding the impact of currency changes and the takeover.
Despite price increases in recent years, “consumers are not trading down in the U.S.,” he said, arguing that shoppers stick with familiar products because of reliability.
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Profit in the quarter rose 11 percent to $3.8 billion, while revenue rose 1 percent to $20.2 billion.
In China, Schulten noted “weak underlying market conditions” as well as lagging sales of premium skin care SK-II, which has been affected by anti-Japanese sentiment.
Schulten said the company had nevertheless seen some improvement in the world’s second-largest economy, but that it would take another quarter or two for sales to return to growth.
Volume trends in several markets, including Egypt, Saudi Arabia and Turkey “remained soft since the onset of heightened tensions in the Middle East,” Schulten said.
Shares of P&G were down 0.5% around midday.
Source: AFP