P&G Earnings Call Nuggets: U.S. Volume and Sales Growth, Category Growth

On Thursday, Procter & Gamble Co (NYSE:PG) reported its first quarter earnings and discussed the following topics in its earnings conference call. Take a look.

U.S. Volume and Sales Growth

William Schmitz – Deutsche Bank: Can you just talk about what the U.S. volume and sales growth was organically in the quarter and then maybe some color between the delta of the sort of 45% of the global business where market share was flat or up and the 60% in the U.S. which is obviously both great incremental progress, but why was there such a big delta between the global and the U.S. business?

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Jon R. Moeller – CFO: So, we had modest growth in organic sales in the U.S. Volume is still down slightly versus a year ago, but importantly an accelerating trend as we went through the quarter. In terms of the difference between businesses representing 60% of sales growing share in the U.S. and the 45% globally, a big portion of that is – there are two drivers of that, one is China, where while we continue to grow at a very attractive rate, 7% in the quarter, for the quarter, we were below market level growth rate of about 11% and as you know, China is our second largest business in terms of both sales and profit. We have strong plans in China going forward. We expect to get back to share growth in the second half, but that’s the predominant driver of the math.

Category Growth

Dara Mohsenian – Morgan Stanley: Jon, I know category growth slowed a bit in the quarter around the world, but on the other hand you had an Olympic boost and the organic sales growth decelerate sequentially despite the easier comp in a number of the adjustments that you made. So, I guess why aren’t we seeing more progress on organic sales growth at this point and what drives your confidence that you will see an improvement in the remainder of the year and if this marketing will pay off just given the difficult consumer environment out there?

Jon R. Moeller – CFO: Well, as I mentioned in our remarks, our full intervention program in developed markets won’t be fully deployed in market until January, and as that happens based on the results that we’ve seen with the first part of that deployment which have been positive as I talked. That’s one of the reasons we gain confidence both that is right to invest in those plans and that they will result an accelerated top line progress. The other thing I hope you picked up as we talked about innovation is that we have a very strong second half innovation program and obviously I can only talk about innovations that we have already announced for the trade, there are number of things that we are not yet talking about, that’s why we should expect the business to accelerate, Bob, I don’t know if you have any further thoughts on that?

Bob McDonald – Chairman, President and CEO: I think I would just say, as Jon said, that we are in the early innings of our program, that our 40/20 plan is on-track. It’s gaining momentum in developing markets and strengthening the core developed markets. We are in the early innings of our innovation programs, as Jon said, that strengthens after January, and we’re also in the early innings of our productivity program. So what you should expect to see is, continued progress. We’re on-track and continued progress is ahead.

A Closer Look: Procter & Gamble Earnings Cheat Sheet>>