Procter & Gamble Co (NYSE:PG, ETR:PRG) reported a surprise decline in first-quarter net sales, its second consecutive quarterly sales drop, driven by consumers in the U.S. and China switching to cheaper brands amid economic uncertainty.
Lower-income U.S. consumers, in particular, are opting for discounted products and private labels, while weak demand in China has led P&G to underperform compared to rivals like Nestlé and Unilever.
Net sales for the quarter were $21.74 billion, missing analysts' estimates of $21.91 billion
Despite the sales miss, P&G's adjusted earnings per share (EPS) beat expectations, reaching $1.93 versus the $1.90 estimate, bolstered by higher product prices. Overall organic volumes rose by 1%, with average prices also increasing by 1%.
P&G maintained its full-year guidance, forecasting organic sales growth of 3% to 5% and core EPS between $6.91 and $7.05.
While some product categories like healthcare exceeded expectations, others, including beauty and grooming, fell short.
CEO Jon Moeller reaffirmed the company’s commitment to its growth strategy, emphasizing innovation and productivity as key drivers.
Shares of P&G lost around 1.7% in premarket trading Friday.