Household Chores for P&G's Incoming CEO

Procter & Gamble's (PG) new CEO, Robert McDonald, steps into power just as the consumer products company faces a price gap with competitors—and a need to regain turf with new, less-premium brands. Procter reported earnings on Aug. 5 of $2.47 billion, down a surprising 18% from $3.02 billion a year earlier.

It's up to McDonald to navigate P&G through these choppy economic waters. The company saw volumes drop as it raised prices. Net sales decreased 11%, to $18.7 billion, while organic sales—which exclude currency changes, acquisitions, and divestitures—fell 1%. P&G said sales fell in several categories across its portfolio, as cash-strapped consumers chose lower-priced products. Procter was hit particularly hard in discretionary areas such as Pringles snacks, Braun electric shavers, Duracell batteries, Oral-B power toothbrushes, and its upscale fragrances. "They seem to be losing share in more places than they are gaining share," says Ali Dibadj, an analyst with Sanford C. Bernstein. "So it was a very disappointing quarter." P&G shares dropped nearly 3%, to 53.91.