(Reuters) – Procter & Gamble (P&G) reported a surprise drop in first-quarter sales on Friday as consumers in its main markets, the United States and China, switched to cheaper brands household and personal care products.
American consumers’ concerns about the health of the world’s largest economy have pushed them to seek out products at the lowest possible prices, weighing on P&G’s sales.
Additionally, due to sluggish demand in China, the consumer goods giant underperformed its rivals like Nestlé and Unilever.
P&G maintained its forecast of annual organic sales growth of 3% to 5% and basic earnings per share of $6.91 to $7.05 (6.36 to 6.50 euros).
Analysts also expected the group to face a slowdown in demand in Latin America, China and the Middle East, under the effects of a campaign to boycott its products due to its links with Israel .
P&G reported a 1% increase in organic volumes in the first quarter, with average prices for its product categories also rising 1%.
Net sales in the first quarter fell 0.6% to $21.74 billion, while analysts had expected a 0.2% rise to $21.91 billion, according to LSEG data.
This is the second consecutive decline in quarterly net sales for P&G, whose stock was down slightly in pre-market trading on Wall Street.
P&G reported first-quarter adjusted earnings per share of $1.93, above analysts’ average estimate of $1.90, driven by higher product prices.
(Report by Ananya Mariam Rajesh, by Elena Smirnova, edited by Augustin Turpin)
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