August 1 - P&G's second quarter sales improved under returning CEO A.G. Lafley who is making his second attempt to turn around the company. Fred Katayama reports.
PLEASE NOTE: THIS EDIT CONTAINS 4:3 MATERIAL It hasn't been more than ten weeks since P&G's heralded former chief executive, A.G. Lafley returned to the corner office, but already, sales are starting to look better even though profits were abysmal as expected. Health care products drove sales volumes higher. Sales even improved at a former stronghold that had turned ugly: beauty products. It was Laffley who had made P&G a force in that segment when he bought the likes of Wella and Clairol at the turn of the century. And analysts say it's crucial that he turn this unit around. Lafley said in a statement, "We will continue to make ... investments in core brands, our biggest innovation opportunities and in our core developed and most promising developing markets." Doing business in 180 countries around the world, P&G's profit was hit by unfavorable foreign exchange, especially in Japan. And profitability fell at the world's largest consumer products company that makes everything from Crest toothpaste to Natura pet food. Looking ahead, the company expects its profits will grow 5 to 7 percent. Deutsche Bank analyst Bill Schmitz was upbeat about P&G's prospects. "With volume growth of 5% and organic growth of 4% above expectations ... P&G is well positioned to leverage its leading global shares with stepped up innovation and marketing investments to regain lost share and expand its categories." The stock responded positively to the results. It's up 18 percent this year.