P&G sees earnings goal hit even without coffee business

Procter & Gamble Co (PG.N: Quote, Profile, Research) expects core earnings per share to grow in double digits on a percentage basis, in line with the company’s long-term goals, despite expected dilution from divesting its Folgers coffee business, company executives said on Thursday. The company announced plans to divest its coffee business to shareholders on Jan. 31. Chief Financial Officer Clayton Daley confirmed on Thursday the divestiture would likely be accomplished in a transaction that would cut P&G earnings by 3 cents to 5 cents a share annually, starting in fiscal year 2009, which begins in July.

“Our goal is to deliver double-digit core earnings-per- share growth even without the coffee business,” Daley said.

The world’s largest household and personal-care products maker also said it has not seen signs of consumers leaving its brands — which include Tide laundry detergent, Pampers diapers and Gillette razors — for lower-cost alternatives, despite the sluggish U.S. economy.

“We have not seen trade down to private label or lower- priced products,” Daley, P&G’s chief financial officer, said during a presentation to the Consumer Analyst Group of New York conference, held in Florida.

“The products we sell are simply not seen by consumers as discretionary,” Daley said.

Private-label products are either seeing flat or shrinking market share in P&G’s top 10 categories, while P&G is gaining market share in two-thirds or its business, Daley and Chief Executive A.G. Lafley said.

Like most consumer products companies, P&G has been raising prices across a host of products to help offset rising costs for oil and other commodities.

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