Procter & Gamble (P&G) reported a decline in profits on slightly lower sales Friday, October 18, for the first quarter of its staggered financial year2025. The company said a recovery in China was still a number of quarters away.
The producer of Tide detergent and Crest toothpaste, Head & Shoulders and Pantene shampoos, P&G, reported mixed sales across its five product categories, with health care growing the most and beauty declining the most.
Revenues slipped one percent to $21.7 billion. Profits were $4.0 billion, down 12 percent from the year-ago level, partly due to some $1.2 billion in one-time restructuring costs tied to the liquidation of assets in Argentina and Nigeria.
Beauty sales were dented by volume declines in Greater China, where the super-premium SK-II skin care brand has been weak for a number of quarters.
“Our organic sales growth, earnings and cash results in the first quarter keep us on track to deliver within our guidance ranges on all key financial metrics for the fiscal year,” said Jon Moeller, Chairman of the Board, President and Chief Executive Officer.
China’s recovery “will take time”
Chief Financial Officer Andre Schulten said the company welcomes recent stimulus measures from Beijing but that it doesn’t expect a quick turnaround in China.
“All we can say at this moment is we’re still down, and we believe it will take a few quarters until we get back to positive growth,” Schulten said on a call with reporters. China’s recovery “will take time,” he said.
In contrast, Schulten described the United States as “very strong” for its consumer products, with growth of about four percent in P&G’s categories.
“The consumer continues to be favorably inclined to P&G, and we also don’t see any trade down,” he said.
P&G confirmed it sees fiscal 2025 sales growth of between two and four percent versus the prior year. “The combined headwinds from foreign exchange and divestitures are expected to negatively impact all-in sales growth by approximately one percentage point,” the company said.
Shares fell 0.6 percent in pre-market trading.
