The Wall Street Journal (WSJ) recently reported that The Procter & Gamble Company’s (PG - Analyst Report) freshly appointed chief executive officer (CEO), Alan George Lafley, was planning to promote four senior executives as presidents of four re-organized sectors who will directly report to him.
Last week, P&G brought back its previous CEO Lafley to immediately replace its existing CEO Robert McDonald, to revive the consumer giant’s current struggling business.
WSJ reported that people who are in the know said that Lafley will re-group P&G’s various brands and products into new sectors that will be headed by four new senior executives from the company. The four new presidents will probably be in line to succeed Lafley as the latter is not expected to serve P&G for more than 2-3 years, considering he turns 66 next month.
WSJ reported that people aware of the matter said that possible candidates include Melanie Healey, group president of North America; David Taylor, group president of global home care; Martin Riant, group president of global baby care; Giovanni Ciserani, group president of global fabric care; and Deborah Henretta, group president of global beauty care.
Lafley has re-joined P&G as President and CEO and will also chair the board of directors. Joining the company in 1977, he became the President and CEO of P&G in 2000 and continued till 2009.
It is widely rumored that McDonald was asked to step down as P&G’s results and turnaround efforts were not showing any material improvement. Fiscal 2012 (ending Jun 2012) was a tough year for P&G and it performed below its expectations in the year. McDonald’s fiscal 2012 pay was shrunk by 6.1% due to the sluggish profits and revenue performance — a clear sign that his job might be at stake. However, the first two quarters of fiscal 2013 were much better, proving to be a breather for McDonald. The relief however, was short lived as the company posted mixed third-quarter results in late April. Though earnings exceeded management’s expectations on strong cost savings, organic revenue growth was quite weak. Its fourth-quarter outlook was also quite subdued with earnings expected to decline from the year-ago results, further adding to McDonald’s woes.
McDonald embarked on a turnaround plan to implement some meaningful changes to re-accelerate its top and bottom-line growth keeping in pace with the peer companies. However, the plan has not yielded any substantial results so far.
P&G carries a Zacks Rank #3 (Hold). Other consumer staples stocks that are worth considering include Flower Foods, Inc. (FLO - Snapshot Report), carrying a Zacks Rank #1 (Strong Buy) and Campbell Soup Company (CPB - Analyst Report) and H. J. Heinz Company , both carrying a Zacks Rank #2 (Buy).