P&G hit as costs climb
Procter & Gamble (P&G) reported a decline in its third-quarter operating margin and said a strong dollar hurt sales of its grooming products, sending shares of the maker of Pampers and Gillette down.
Soaring commodity and transportation costs have eroded margins across the consumer goods industry over the past year. P&G said its core operating margin declined by 60 basis points to 19.9%, and was hurt by foreign exchange fluctuations.
The world’s number-one maker of personal care goods, which gets more than half its sales from outside North America, has tried to offset the higher costs by upgrading several products and then raising their prices.
P&G reported a 5% rise in organic sales, a keenly watched metric that excludes the impact of currency changes and mergers and acquisitions. Price hikes contributed two percentage points to organic sales growth.
Net income rose to $2.75bn (€2.44bn) in the quarter as sales rose 1.1% to $16.46bn.
