Procter & Gamble took a hit from the strong dollar, like almost all U.S. companies with business overseas, pushing third-quarter revenue below expectations.
Because of the unfavourable currency environment, the company believes revenue for the year will slide 5% to 6%t. It said Thursday it still expects adjusted earnings to be in line to down low single digits compared with last year.
Procter & Gamble, which makes everything from Gillette razors to Crest toothpaste, earned $2.1 billion for the period ended March 31. That compares with $2.6 billion last year.
Revenue for the Cincinnati company declined to $18.1 billion from $19.6 billion, short of the $18.4 billion Wall Street had expected.
The biggest sales decline during the quarter was in the beauty, hair and personal care segment, which posted an 11% drop. Sales for the fabric care and home care unit fell 9%, while sales for the baby, feminine and family care division slipped 6%.
The quarter’s performance was hampered by a strong dollar, which can hurt companies that do a large share of their business overseas because sales in other countries translate back into fewer dollars.
Chief Financial Officer Jon Moeller said during a conference call that currency challenges increased during the quarter, with currencies in Brazil, Turkey and the Ukraine weakening versus the dollar when compared with the second quarter.
Chairman and CEO A.G. Lafley said in a written statement that Procter & Gamble Co. will offset the stronger dollar over time through higher prices and by lowering costs.
The consumer products maker is also continuing with plans announced in August to shed many of its brands. Moeller said Thursday Procter & Gamble currently expects to exit about 100 and keep approximately 65 of its leading brands, such as Pampers and Tide.
“Every brand we plan to keep is strategic, with the potential to grow and create value,” he said.
The company is looking to wrap up its efforts by fiscal 2016’s end.
