P&G Exec Says Work To Do In China, Russia
NEW YORK (AP) -- Procter & Gamble must do more to improve overall sales in Russia and China, according to the company's chief financial officer, and it has a "disproportionate" amount of work to do in developed markets to revive beauty product sales, once one of its most profitable ventures.
P&G is on track to log 40 percent of its sales in emerging markets by the end of the fiscal year, double the percentage from a decade ago. But it's lagging rivals like Unilever and Colgate, CFO Jon Moeller said Wednesday at a Deutsche Bank investor conference in Australia.
While sales and market share improvement are on track in Brazil and India, those trends "haven't turned the corner yet" in China, he said.
And in Russia, the company is adjusting pricing and playing up coupons to compete.
In more developed markets, Moeller acknowledges that there is a long way to go.
Pantene and Olay, the company's biggest beauty brands, account for $5 billion in global sales but have been losing market share.
"We know it, we're working hard to fix them," Moeller said. "Major changes in momentum of brands this big don't happen overnight. It will take some time."
The consumer products company, which also makes Tide detergent and Crest toothpaste, is now introducing more premium-priced and lower-priced hair care items and also a Fresh Effects for Olay line, aimed at younger consumers.
The company is on track or ahead of schedule in all areas to cut $10 billion in costs by 2016, Moeller said. P&G had trimmed 6,700 non-manufacturing jobs by the end of May, 1,000 more than its target. But it puts the company closer to cutting its overall work force by 2 percent to 4 percent each year for the next three fiscal years, he said.
A.G. Lafley, who reclaimed the CEO job last month from Bob McDonald, is "committed to drive and accelerate" P&G's restructuring plan, Moeller said.
Asked whether Lafley was brought back from retirement because the company's succession plan was inadequate, Moeller said that wasn't the case.
"His coming back reflects the board's judgment at this point in time he's the best person for job," Moeller said. "That doesn't reflect necessarily a vacuum of leadership."
Shares of Procter & Gamble Co. fell 19 cents to $77.93 in midday trading.