P&G reports better results as it fends off activist challenge

NEW YORK: Procter & Gamble, seeking to fend off a challenge from activist investor Nelson Peltz, pointed to better-than-expected earnings as evidence its makeover of the consumer products giant is on track.

P&G reported increased profits in the just-finished quarter and projected higher sales in fiscal 2018, a contrast to the sluggish sales of recent years.

Chief executive David Taylor, addressing analysts for the first time since Peltz launched his proxy campaign earlier this month, said brands like Tide detergent and Bounty paper towels continue to enjoy strong market positions.

And the company is addressing weaker businesses, such as the US shaving market and Chinese diaper market, he said.

“The plans we’ve put in place are accelerating our efforts and it takes time to do it right,” he said.

“It will not only require continued focus as an organization but also that we prevent anything from derailing the work that is delivering improvement.”

Neither Peltz nor his firm, Trian Fund Management, was mentioned by name during a 90-minute conference call with analysts, but the campaign shadowed Taylor’s lengthy opening remarks and seemed to influence many of the polite, but pointed, questions.

Peltz signalled he was not impressed with the results, reiterating that P&G’s return to shareholders has lagged most of its peers.

“Trian believes P&G needs to address the root causes of this consistent underperformance, including deteriorating market share across most of its categories and excessive cost and bureaucracy,” the fund said in a news release.

“Trian believes P&G can once again be a best-in-class performer but it must take decisive action that goes above and beyond what it has previously announced, including committing to significantly changing its overly complex organizational structure and slow moving and insular culture.”

The consumer products giant, with products like Old Spice deodorant and Charmin toilet paper, said fiscal fourth quarter profit jumped to US$2.2 billion, up 13.5 per cent compared to the same three months of the prior year. — AFP