Slower growth in China and tough markets in Europe and the United States prompted Procter & Gamble, the world’s largest household product maker, to cut its growth forecasts yesterday in the midst of a $10bn (£6.35bn) cost-cutting programme.
The US maker of Tide laundry detergent, Gillette razors and a host of other products also blamed the strong dollar and higher commodity costs for hitting growth after admitting it had struggled to grow operating profit over the past three years.
Chief executive Bob McDonald said growth in developed markets, making up 60 per cent of sales, had dropped off significantly, while in emerging markets it suffered mandated price cuts in Venezuela and import restriction in Argentina.
“We have seen sequential deterioration in the rates of market growth in both the US and Europe, and there has been a slowdown in the rate of market growth in China,” he said.
The Cincinnati-based group has been struggling to reignite growth and announced the $10bn cost-cutting plan earlier this year. The company has frustrated investors who want a quicker turnaround as it underperforms competitors.
The tough trading prompted Mr McDonald to cut his forecast for the group’s April-June fourth quarter to underlying sales growth of 2-3 per cent, down from 4-5 per cent, while the core quarterly earnings target was trimmed to 75-79 cents per share, from 79-85 cents.