Instead, he confronted an
unusually angry barrage from Wall Street analysts over the latest in
a string of weak results from the world's largest consumer products
analysts showed little restraint in venting their frustration after
P&G lowered its profit outlook and said it would roll back recent
attempts to raise prices in key markets.
sales rose 3%, which looked skimpy against an 8.5% rise for rival
Unilever PLC and a 6.5% increase for
P&G blamed weak
developed markets and competitors' failure to follow its lead on
price hikes. But some analysts blamed Mr. McDonald.
"It strikes me that
from an execution perspective, P&G isn't delivering," said Citigroup
analyst Wendy Nicholson.
"There's so many
excuses: Not our fault, competition didn't follow the pricing; not
our fault, Venezuela changed; not our fault, the developed consumer
isn't robust," she continued. "And I just say to myself, God, where
is the mea culpa?"
Tim Conder, a Wells
Fargo analyst, and Ali Dibadj, a Sanford C. Bernstein analyst,
echoed those sentiments, pointedly asking Mr. McDonald why P&G
continued to stumble when its rivals managed to steer around the
"How much patience,"
Mr. Dibadj asked, "does the board have?"
Nicholson, Mr. McDonald said: "Let me be clear. It is my fault. I am
the CEO of the company. I do take responsibility."
The tone of the
comments was remarkable by the often soft-shoe standards of Wall
Street stock research.
Analysts are often
accused of being overly forgiving with CEOs, a reputation they feed
by regularly uttering words of congratulations on conference calls.
Good relations are
important to preserve access to company executives, so criticisms,
when they do come up, tend to be heavily couched.
But frustration is
growing with P&G's performance. The company has failed to squeeze
the expected results out of big areas like its beauty and grooming
business, and has been slow to cut costs even as consumer demand
weakened in the wake of the recession.
Those failings are
evident in P&G's stock, which has changed little over the past two
years. Meanwhile, Unilever's is up 13% and Colgate's is up 17%.
P&G shares fell 3.6%
to $64.46 Friday, their biggest drop in 2˝ years. The decline came
after the maker of Bounty paper towels, Pampers diapers and other
household staples reported a 16% decline in earnings amid high
commodity costs and charges related to cost-cutting plans.
The consumer products
giant cut prices aggressively in recent years in a world-wide battle
for market share. More recently, it has tried to roll back some of
those cuts as input prices have risen.
Those moves cut into
P&G's market share, which fell in 55% of the categories and
countries where it competes.
As a result, P&G said
it would again cut prices for powdered laundry detergent in the
U.S., as well as on oral care, automatic dishwashing detergent, and
blades and razors in North America.
P&G is also lowering
prices on its laundry detergent in the U.K. and Mexico. The company
says it implemented $3.5 billion in price increases this year and
plans to roll them back by $200 million.
P&G announced a
cost-cutting program in February that involves eliminating more than
4,000 jobs, streamlining its massive marketing budget and chopping
other expenses by fiscal 2016.
The company plans to
steer savings from the cuts into expanding its position in emerging
For the quarter ended
March 31, P&G reported a profit of $2.41 billion, down from $2.87
billion a year earlier. For the full fiscal year, which ends in
June, the company said it expects earnings of $3.82 to $3.88 a
share. It had previously forecast earnings of $3.93 to $4.03 a
Price controls in
Venezuela, which required price cuts of up to 25% on certain P&G
products, are also weighing on results for the company.
contributed to this article
Write to Emily Glazer at