Strong dollar weighs on Procter & Gamble

Procter & Gamble, the consumer products group pursuing a comeback under second-time around chief executive AG Lafley, blamed a strong dollar for battering sales in the first quarter.

The company behind brands such as Pantene and Tide reported profits of $2.1bn, or 75 cents a share, compared with $2.6bn, or 90 cents a share, a year ago.

Sales fell nearly 8 per cent to $18.1bn, which reflected an 8 percentage point hit from a dollar that has risen more than 20 per cent since July.

Wall Street analysts forecast earnings of 90 cents a share and sales of $18.4bn. On a currency-neutral basis, stripping out one-time items, P&G made 92 cents a share.

P&G, which derives more than 60 per cent of its sales outside the US, is particularly exposed to a robust greenback, Mr Lafley said.

"This quarter the productivity progress was offset by foreign exchange," he said. "As we have done before, we'll offset foreign exchange over time through a combination of pricing, mix enhancement and cost reduction."

The Cincinnati-based company this month announced a 3 per cent increase in its quarterly divided to 66 cents a share.

Sales at its beauty and healthcare division fell 3 per cent. It has previously been reported that P&G was looking to sell the struggling division.

Shares of P&G, which have gained 2 per cent over the past year, fell 1.8 per cent in premarket trading to $81.47.

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