The first half of 2017 is in the books, and Procter & Gamble (NYSE:PG) shareholders are running just behind the market so far. Their stock rose less than 4% over the first six months of the year, compared to a 7% boost for the Dow Jones Industrial Average.

Let's look at the main reasons Wall Street isn't jazzed about P&G's performance lately -- and whether the consumer goods titan can turn things around in the back half of the year.

A woman shops for cleaning supplies.

Image source: Getty Images.

Two very different quarters

The company started the year off on a strong note. Organic sales growth came in at 2% in its fiscal second quarter to edge past management's expectations. That figure was driven by a broad, healthy mix of volume and pricing gains across P&G's five main business segments, too. Even the grooming division -- home to the Gillette razor blade franchise -- showed encouraging sales gains. "We delivered good results in a difficult operating environment," CEO David Taylor said in a press release in late January as P&G raised its full-year sales outlook to 2.5% at the midpoint of guidance from 2%.

That positive momentum didn't last long, though. In its fiscal third-quarter report in late April, P&G announced surprisingly weak sales, with the grooming segment suffering especially bad losses. The division posted a 6% slump in organic revenue thanks to falling prices and a move toward cheaper disposable blades. Overall, the company's volume rose by just 1% as pricing held flat.

PG Chart

Data through the first six months of 2017. PG data by YCharts.

Taylor and his team blamed a weakening industry as the key driver behind the growth reversal. "The third quarter macro environment was characterized by a slowdown in market growth, continued geopolitical disruptions and foreign exchange challenges," he told investors. The good news for shareholders is that P&G fared better than rival Kimberly-Clark (NYSE:KMB), which announced a 1% drop in organic sales in its most recent quarter. Kimberly-Clark, the main global challenger to P&G's Pampers franchise, lowered its full-year growth outlook to below 2% as its core U.S. market slowed to a crawl.

Can P&G turn the corner?

P&G's more diverse sales base should help it deliver slightly faster growth than Kimberly-Clark in 2017. Yet the full-year number that investors will see in early August is expected to be closer to the 2% uptick that management originally targeted than the 2.5% boost executives forecast in January.

P&G logo.

Image source: P&G.

Through all the growth struggles, the improvement in P&G's finances hasn't missed a beat. Thanks to a combination of aggressive cost cuts, efficiency gains, and a portfolio reboot, operating margin is up above 20% of sales, leaving Kimberly-Clark and most other rivals far behind. P&G also in April raised its outlook for free cash flow productivity to 95%. That would mark the third straight fiscal year of outperformance in this key metric.

The financing wins are making it easier for P&G to increase direct returns to shareholders, both through faster dividend growth and ramped-up stock repurchase spending. It hiked its dividend by 3% this year for a nice boost over last year's 1% uptick. Overall, P&G plans to deliver a whopping $22 billion to shareholders in the fiscal year that ends in August.

That excess cash would be more useful to investors if the company can use a chunk of it to help return its portfolio to market-beating sales growth. To that end, P&G is currently increasing investments in marketing and innovation.

But the stock isn't likely to spike without evidence of accelerating organic revenue gains. That's why investors will be keeping a close eye on the company's sales outlook for 2018 when it closes its fiscal 2017 books on Aug. 2.