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Procter & Gamble to slim down product lineup

By WTOP Staff

MICHELLE CHAPMAN
Associated Press

NEW YORK (AP) — Procter & Gamble is about to shrink.

The world’s largest consumer products maker said it will jettison more than half its brands around the globe over the next year or two, leaving it with about 70 to 80 of its top performers when the nips and tucks are complete. The maker of CoverGirl, Pampers and Tide declined to specify what exactly it will shed but noted they’re smaller brands that collectively account for less than 10 percent of sales.

CEO A.G. Lafley said Procter & Gamble should have made the move long ago.

“In an ideal world, we would’ve done this at the depth of the financial crisis, in the recession,” Lafley said Friday during a conference call with analysts and investors. “Having said that, I don’t see any reason to wait. I don’t see any virtue in waiting another minute.”

P&G had already been slimming down in recent years, having sold off food brands such as Jif peanut butter, Folgers coffee and Pringles chips. More recently, it moved to get out of the edible business entirely by selling off Iams pet food to Mars Inc. Now it’s focusing on culling its consumer products, which has mushroomed over the years to include beauty products, detergent, paper towels and razors.

It’s a major undertaking for the company, which introduced Ivory soap in 1879 and even helped coin the term “soap opera” with its sponsorship and production of daytime TV dramas. Today, Procter & Gamble has 22 brands that pull in more than $1 billion in annual sales, including Pampers, Gillette and Tide. It has another 19 brands with $500 million or more in annual sales.

“It’s hard to believe we started with candles and soap in 1937,” Lafley said in a phone interview.

Lafley chalked up the company’s expansive portfolio to the natural evolution of multinational companies, which tend to acquire and create new brands over time. To right its bloated ship, Procter & Gamble came up with a list of criteria for which businesses it wanted to compete in. Ultimately, Lafley said it decided to focus on categories where it has highly differentiated products that are among the market leaders.

The decision to sell or discontinue 90 to 100 brands — many of them smaller, regional products — comes as Procter & Gamble fights to boost sluggish sales. In the latest quarter, it reported a slight decline in sales and missed Wall Street expectations. When discounting factors like foreign exchange rates and divestitures, it said sales rose 3 percent.

Lafley, who also served as CEO from 2000 to 2009, was brought back as chief executive last year as Procter & Gamble faced pressure to improve its results. Activist investor William Ackman in particular has been vocal about the company’s need to streamline operations.

By pruning its product lineup, Procter & Gamble is hoping to put more energy behind products with bigger potential. With its Always Infinity female hygiene pads, for instance, Lafley conceded the company didn’t adequately communicate how the absorbing technology made them superior.

The company is entering new areas as well, with plans to start shipping adult diapers under the Always Discreet name in North America to capitalize on the area’s aging population.

“Obviously, we’re hoping to find success in female incontinence,” Lafley said.

For its fiscal fourth quarter, Procter & Gamble Co. said cost-cutting helped boost its profit by 38 percent. Net income increased to $2.58 billion, or 89 cents per share, for the three months ended June 30.

Excluding one-time items, it earned 95 cents per share, four cents more than expected.

Revenue slipped to $20.16 billion, missing Wall Street expectations for $20.47 billion.

For fiscal 2015, P&G anticipates adjusted earnings growth in the range of mid-single digits. Revenue is expected to be in the low single-digit range.

Shares rose 3 percent to $79.90.

___

AP Writer Mae Anderson contributed to this report.

Follow Candice Choi at www.twitter.com/candicechoi

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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