Sarah Halzack is a Bloomberg Gadfly columnist covering the consumer and retail industries. She was previously a national retail reporter for the Washington Post.

As activist investor Nelson Peltz tries to nab a seat on Procter & Gamble Co.'s board, the company is eager to convince shareholders it has this whole turnaround thing under control.

So the relatively upbeat earnings report it delivered on Thursday couldn't have come at a better time.

The company behind brands such as Gillette razors, Tide detergent and Bounty paper towels said organic sales -- a measure that excludes currency fluctuations -- were up 2 percent in the latest quarter from a year earlier. Organic sales were also up 2 percent for the full year, double the gain of the previous year. And P&G is forecasting growth for the year ahead that matches or exceeds that. 

Glimmer of Hope
P&G's organic sales growth, a measure that excludes currency impacts, improved in the past year
Source: Company filings

When Peltz's Trian Fund Management LP laid out plans last week to get him elected to P&G's board, it painted a portrait of a corporate behemoth adrift and in need of a course-correction.

In a presentation published online, Trian argues P&G's market share has deteriorated in key areas and that it hasn't done enough to cut costs and trim bureaucracy, even though it has unloaded more than 100 brands since 2014.

Losing Ground
P&G has lost market share in some of its key product categories
Source: Bloomberg, Euromonitor International

If you read between the lines of P&G executives' statements on Thursday, you can hear them rebuffing Peltz's help.

In the earnings release, CEO David Taylor said, "Achieving our objectives will not only require continued focus as an organization, but also that we prevent anything from derailing the work that is delivering improvement. We, as a management team and Board, are confident we have the right plan in place."

P&G executives may be right that Peltz doesn't have the answer to their problems. As Gadfly's Brooke Sutherland has noted, Peltz has mostly been clear about what he won't do to clean up P&G. In particular, Trian has said it is not seeking to break up the company or dump its CEO. But Peltz hasn't offered a specific plan for what he will do.

Whatever P&G thinks of Peltz's overtures, though, this latest quarterly report hardly suggests its troubles are behind it.

The company said organic sales of baby care products sank in the "low single digits" in the quarter from a year ago due to competitive pressure. Oral-care sales fell, too, partly for the same reason.

Executives conceded the lucrative Gillette razor business -- which has been knicked by upstart competitors such as Harry's Razors and Dollar Shave Club, recently scooped up by rival Unilever NV -- is still troubled. P&G has to do more to bring customers to the brand in the first place, and then hopefully get them to trade up to fancier, higher-margin models. 

In other words, this one quarter doesn't exactly rebut Peltz's argument, that the current moment in consumer goods demands greater imagination and agility than P&G has lately displayed.

P&G can point to some progress on the digital front, with strong growth in online organic sales. But it had better watch out: Inc. is investing in a growing slate of private-label consumer products, which could quickly become formidable competitors as the ranks of Prime members swell.

And P&G's legacy retail partners are embracing changes such as just-in-time inventory. P&G still must adjust its supply chain accordingly.

No matter who is sitting around the table in P&G's boardroom, these challenges aren't going way.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Sarah Halzack in Washington at

To contact the editor responsible for this story:
Mark Gongloff at