PARIS - Procter and Gamble warned on Wednesday a slowdown in developed countries hitting demand for its consumer products and negative foreign exchange effects would lead to a drop in sales and profits.
The US group which owns some of the best known brands in the world such as Gillette razors and Tide laundry detergent, said it expects US$0.75-0.79 (S$0.95-1.00) earnings per share in the quarter ending this month.
That was down from the US$0.79-0.85 it had expected previously and below the average analyst expectation of US$0.82 earnings per share.
P&G said in a statement that “the revisions to the company’s fourth quarter outlook are primarily driven by slower than anticipated top-line growth from slower than expected market growth rates and market share softness in developed regions and negative impacts from foreign exchange rate changes.”
It said organic sales growth for the quarter was now expected to be in the range of two to three percent instead of four to five percent.
Foreign exchange effects are expected to reduce net sales by some four percent, with the final figure now expected to be down one or two percent instead of up one or two percent, it added.
For its 2012-2013 fiscal year, P&G said organic sales are expected to increase in the range of two to four percent. Earnings per share should post a percentage rise of mid-single digits.
“We are making the necessary adjustments to our growth strategy to increase focus on our core business and to achieve more balanced growth across geographies, product categories and the top and bottom lines,” P&G chief executive Bob McDonald said at a consumer products conference in Paris on Wednesday.
In its third quarter P&G saw net profit fell 16 percent from the year-ago quarter to US$2.4 billion (S$3 billion) despite a two percent rise in sales.