P&G continues restructuring in face of lukewarm results

Despite challenges, company increases market share in seven of 10 categories Procter & Gamble Co., the maker of Tide laundry detergent, reported its quarterly results Tuesday.

NEW YORK— Procter & Gamble Co. is still the king of diapers and shampoo, but an onslaught of new competition and tighter ordering from traditional retailers is tarnishing the consumer-goods giant’s crown.

Investors were lukewarm to the company’s fourth-quarter results Tuesday, leaving the shares little changed after sluggish organic sales growth.

In addition to the new rival products — which range from Amazon.com Inc.’s brand of diapers to Kroger Co.’s new line of razors — P&G is contending with higher pulp prices and shipping costs that hurt its profitability in the period. Kimberly-Clark Corp. also cited commodity expenses when it cut its profit forecast last week. The competition has limited the consumer-goods company’s ability to pass these higher costs on to shoppers.

“We are operating in a very dynamic environment affecting the cost of operations and consumer demand in our cate- gories and against highly capable competitors,” chief executive officer David Taylor said in a statement.

Taylor has worked to reignite growth by streamlining the company’s Byzantine structure while cutting billions in expenses, but critics charged that his efforts didn’t go far enough. That led billionaire activist Nelson Peltz to wage a protracted battle for a board seat last year, a spot he eventually won after initial disputes over election results. Peltz, who joined the board in March, has pushed for a more radical restructuring of the company and a focus on newer brands that could woo younger shoppers.

P&G shares rose 0.2 per cent to $80.34 (U.S.) at noon in New York. They had dropped 13 per cent this year through Monday’s close.

Revenue was $16.5 billion, compared with projections for $16.52 billion. Organic sales — which exclude currency or acquisition and divestiture effects — rose 1 per cent. Excluding some items, profit amounted to 94 cents a share last quarter, the company said in the statement. Analysts had predicted 90 cents, on average.

Still, the company is gaining customers, increasing market share in seven of 10 categories last quarter, chief financial officer Jon Moeller said on a company media call Tuesday. P&G is seeing less demand from many retail customers, however, as merchants streamline their own ordering to boost profit.

Moeller also said the company is facing “new challenges” to its Gillette brand.

Higher costs for commodities and shipping, as well as an impact from currency fluctuations, ate into P&G’s profitability.