A sharp drop in demand for Procter & Gamble's grooming products cut into sales growth at the consumer products company. Fred Katayama reports.
Strong sales of SK-II skincare products in Asia made Procter & Gamble's quarterly profit look better, but it couldn't mask tepid quarterly sales. Sales overall inched up just 1 percent and missed analysts' forecasts. Cutting into that growth: a 22 percent sales drop in its grooming business despite cutting prices. RBC Capital Markets analyst Nik Modi, who believes P&G shares are overvalued, said, "Grooming was especially weak." P&G's shares dropped at the market open Friday, chipping into their nearly 9 percent gain this year. Profit rose and beat forecasts. Making the biggest contribution to the bottom line: higher sales of fabric softeners and laundry detergents like Tide and Febreze. The results come just one week after activist investor Nelson Peltz narrowly lost his bid for a board seat at P&G in a historic proxy battle. He had pushed for a re-organization, saying the company was losing market share because of what he called its "suffocating bureaucracy." Looking ahead, P&G said it's sticking to its full-year sales and profit forecasts.