Procter & Gamble Co. said Thursday it will miss a second-quarter sales target as the consumer products company acknowledged it isn't immune to the recession.
The maker of such products as Tide detergent, Pampers diapers and Gillette shavers, P&G said organic sales _ that is, sales not linked to acquisitions _ won't meet the 4 percent to 6 percent growth goal in the quarter ending in December. But the Cincinnati-based company still expects organic sales to grow between 4 percent and 6 percent over its fiscal 2009, which ends in June.
P&G leaders, in a meeting with Wall Street analysts, said households, retailers and distributors are cutting back worldwide.
"P&G is recession-resistant, but not recession-proof," A.G. Lafley, chairman and CEO, told analysts.
However, P&G affirmed its profit outlook for the quarter and full year, and Lafley said P&G's strong brand portfolio, innovation, increasing productivity and cost cutting will help it through an economic downturn that he said also offers opportunity to improve its competitive position.
"I'm confident P&G will continue to be a company you can count on through good times and challenging times alike," he said.
Lafley said as consumers cut spending, P&G is seeing some turning to private label products but also more sales in its own lower-cost brands such as Gain detergent and Luvs diapers and "basic" versions of Bounty paper towels and Charmin toilet paper.
Although energy and some other costs are falling, P&G, which has passed along increased costs with price increases in the past year, doesn't immediately plan any major price rollbacks in a still-volatile economic climate.
P&G also said it is accelerating its move away from the pharmaceutical business, where the osteoporosis treatment drug Actonel is among the company's 23 brands with at least $1 billion in annual sales. P&G is stopping new investment in pharmaceutical drugs, which spokesman Tom Millikin said will mean a 6 to 7 percent reduction of the some 2,900 employees in P&G's pharmaceutical division.
Fewer than half of the cuts will come in a P&G center in the Cincinnati suburb of Mason, with the rest from various field offices, he said.
The company sees more potential in building up its nonprescription Vicks cold medicines and other personal health products such as Always and Tampax feminine care.
In other highlights of the analysts' meeting, which P&G holds every two years, the company said it:
__ plans more aggressive expansion in emerging markets such as China and India. Developing countries account for 30 percent, or about $25 billion of its annual sales, and 60 percent of its annual sales growth.
__ sees Gillette, acquired in 2005, becoming what P&G calls "a global mega-brand" for men's products. P&G this year has added shampoo, body wash and other new items to the shaver brand.
_ isn't ruling out more acquisitions. "We're hoping that crisis might turn up a little more opportunity," Lafley said.
Lafley, 61, also shot down speculation he is ready for early retirement.
"The rumors of my passing are greatly exaggerated," Lafley said. "We're going to stay together. We have a lot left to do."
P&G expects second-quarter profit of $1.58 to $1.63 per share and full-year earnings of $4.28 to $4.38 per share. On average, analysts expect the company to earn $1.58 per share on $21.38 billion in total revenue in the second quarter, and $4.28 per share for the year on $84.36 billion in total revenue.
P&G shares fell 54 cents to close at $58.58. They have traded in a range of $53.77 to $75.18 in the past year.
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