Procter & Gamble's sales fall for fifth straight quarter

Procter & Gamble sales fell for the fifth straight quarter as a stronger dollar took its toll, with currency fluctuations likely to hurt 2015 sales by 6-7 percent.

The world's largest household products maker, which gets roughly two-thirds of sales from outside the United States, reported a steeper-than-expected 8.3 percent fall in quarterly sales on Thursday.

Procter & Gamble expects to start at least 18 new manufacturing plants in developing markets in the next few years as a measure to further localize its supply chain and mitigate foreign currency fluctuations, Chief Financial Officer Jon Moeller said on an earnings conference call.

The company is also driving savings from cost of goods sold to $1.6 billion this year, ahead of its $1.2 billion target per year along with increasing manufacturing productivity by 5 percent this year, he said.

In the past the company has recovered between half and two-thirds of significant devaluation in developing currencies through pricing but the recovery will be less this year due to competitive pressures, Moeller said.

"This time it will be less than that because many of our internationally domiciled competitors..aren't seeing the full extent of the pressure that we are seeing," he said.

Sales for the maker of Tide detergent and Pampers diapers fell to $18.14 billion in the third quarter ended March 31, hit 8 percentage points by a strong dollar and 1 percentage point by the planned divestitures of some brands.

Sales in the company's beauty, hair and personal care products business fell for the ninth quarter in a row, dragging down P&G's total sales and volumes.
Analysts on average were expecting revenue of $18.49 billion, according to Thomson Reuters I/B/E/S.

Net income attributable to P&G fell to $2.15 billion, or 75 cents per share, in the third quarter ended March 31, from $2.61 billion, or 90 cents per share, a year earlier.

Since August, where P&G outlined a plan to sell slow-growing brands and cut jobs to revive sales growth, a total of 40 brands have either been sold, discontinued or will be consolidated, Moeller said.

The new company will retain 65 leading brands and the consumer goods maker will be in a position to announce a large part of its brand divestiture program by as early as this summer, he said.

On an adjusted basis, the company's earnings of 92 cents per share were in line with analysts' average estimate.

Up to Wednesday's close, P&G stock had fallen nearly 9 percent this year.

$1 = £0.67