Mr. Moeller said P&G's share results improved as the quarter
went on and have been better still so far in January, suggesting
better things to come in the current quarter.
P&G overdelivered on the bottom line in part because people
have been leaving through voluntary separations faster than
forecast, with 5,500 of the positions targeted in a 5,700-person
reduction in non-manufacturing employment by June having already
P&G already planned to step up marketing and innovation in
the January to June period, Mr. Moeller said, adding those plans
"will be strengthened based on over-delivery in the second
Filling the retail pipeline behind new launches, particularly
beauty introductions for such things as the relaunch of Vidal
Sassoon hair care in the U.S., Pantene Expert Series, a host of new
Olay products and Cover Girl's entry into nail polish fueled some
of a 2% volume increase in the U.S. last quarter, Mr. Moeller said.
The pipeline fill also explained some of the difference between
that number and a 2% volume decline found in retail-scanner
But the P&G executives said its new products, including Tide
Pods, continue to be well-received by consumers.
"Consumers remain very receptive to real innovation and are
willing to pay for it," Mr. McDonald said. "And importantly,
retailers are hungry for real innovation that grows categories and
grows market basket."
For P&G and Mr. McDonald, which has been under pressure from
analysts and investors including William Ackman of Pershing Square
Capital Management, the results relieve some pressure.
"We're focused on the plan," Mr. McDonald said in a call with
journalists when asked if the results would relieve investor
pressure. "We want a higher share price just like our shareholders
P&G's shares rose 3.6% to nearly $73 in early trading today,
a five-year high.
In an interview with CNBC today, Mr. Ackman backtracked on prior
criticism of Mr. McDonald. "P&G put up a very good quarter," he
said. "Their organic revenue growth was a little lower than their
competitors, but they're making progress. I hope Bob can turn this
thing around. He deserves a lot of credit. Don't misinterpret my
previous statement. I think based on the past three years at
P&G, it certainly looked like Bob is not the right guy for the
company. But if the company can make dramatic progress, and I think
this quarter is an indication of very significant progress, then I
hope Bob can be successful and can make it."
"With promise of reinvesting productivity savings in stepped-up
new product initiatives and marketing support, we believe the
company is at an important strategic crossroads to reestablish
itself as the growth and innovation leader in the industry," said
Deutsche Bank analyst Bill Schmitz in a note this morning.
P&G's improved sales results should also relieve pressure to
cut prices, which could lead competitors to do likewise. Mr.
Moeller said P&G now has rolled back $500 million of $3.6
billion in prior price hikes but is making only minor