(MENAFN- AFP) Procter & Gamble, seeking to fend off a challenge from activist investor Nelson Peltz, Thursday pointed to better-than-expected earnings as evidence its makeover of the consumer products giant is on track.
P&G reported increased profits in the just-finished quarter and projected higher sales in fiscal 2018, a contrast to the sluggish sales of recent years.
Chief executive David Taylor, addressing analysts for the first time since Peltz launched his proxy campaign earlier this month, said brands like Tide detergent and Bounty paper towels continue to enjoy strong market positions.
And the company is addressing weaker businesses, such as the US shaving market and Chinese diaper market, he said.
"The plans we've put in place are accelerating our efforts and it takes time to do it right," he said.
"It will not only require continued focus as an organization but also that we prevent anything from derailing the work that is delivering improvement."
Neither Peltz nor his firm, Trian Fund Management, was mentioned by name during a 90-minute conference call with analysts, but the campaign shadowed Taylor's lengthy opening remarks and seemed to influence many of the polite, but pointed, questions.
Peltz signaled he was not impressed with the results, reiterating that P&G's return to shareholders has lagged most of its peers.
"Trian believes P&G needs to address the root causes of this consistent underperformance, including deteriorating market share across most of its categories and excessive cost and bureaucracy," the fund said in a news release.
"Trian believes P&G can once again be a best-in-class performer but it must take decisive action that goes above and beyond what it has previously announced, including committing to significantly changing its overly complex organizational structure and slow moving and insular culture."
- Better sales forecast -
The consumer products giant, with products like Old Spice deodorant and Charmin toilet paper, said fiscal fourth quarter profit jumped to $2.2 billion, up 13.5 percent compared to the same three months of the prior year.
But sales were essentially flat compared with the same period of 2016 at $16.1 billion.
P&G projected net sales growth of about three percent for fiscal 2018, as well as core earnings per share growth of five to seven percent.
That is an improvement over recent years, during which sales have been dampened by uneven global and price wars in the cut-throat consumer goods market
The company also returned $22 billion to shareholders through dividends and share buybacks.
A 37-year veteran of P&G, Taylor was promoted to chief executive in 2015. Under his predecessor, AG Lafley, P&G sold off more than 100 brands in an effort to focus the company's innovation and marketing around core products such as Head & Shoulders shampoo, Pampers diapers and Oral B tooth care.
Taylor pleaded for time to let the plan work.
"We have prioritized long-term health of the business as the key priority," Taylor told analysts. "We need to create stronger positions for our brands."
Taylor said the company was taking an innovative approach to introducing premium products under established brands and touting its products through new technologies and groundbreaking ads, such as the "Share the Load" campaign in India for Ariel detergent that won plaudits for its message that men should help out with house chores.
And Taylor sought to rebut Peltz' criticism that P&G's corporate structure is bloated and insular, pointing to its hiring of outsiders to key executive roles and establishment of an in-house new ventures team.
"People underestimate P&G's outreach to outsiders," he said. "We are actively looking to build a culture of appropriate risk taking."
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