NEW YORK (AP) -- Procter & Gamble's chief financial officer said Wednesday that the company will not accelerate its expansion as it seeks to resume building its market share and improve its operating results.
The world's largest consumer products company - maker of Tide detergent, Olay skin scream and numerous products under 23 other brands with more than $1 billion each in annual sales - has sought growth in emerging markets like Latin America and India as sales slowed in developed markets.
Many consumer product makers have shifted their attention in the same way. At Procter & Gamble, revenue from emerging markets will account for about 37 percent of annual sales by the end of this fiscal year, up from 20 percent in 2000.
But high costs and issues like supply chain shortages, coupled with costs related to expanding, have led to disappointing results and shrinking market share for P&G, which lowered its fiscal-year guidance in April.
On Wednesday, CFO Jon Moeller said the company may have been expanding a bit too fast, particularly as it faces high commodity costs and an uncertain economy in the U.S., Europe and elsewhere.
"In retrospect we may have overextended ourselves a bit with the pace of our portfolio and geographic expansions," Moeller said. "Had we anticipated the commodity cost increases and markets contractions in developed markets that we ultimately experienced, we might have chosen a slightly slower pace."
Moeller said P&G now plans to stabilize growth in its top 40 country-category combinations, which account for more than 50 percent of sales and are disproportionately in North America and China. P&G has about 1,000 country-category combinations in total.
Once those core businesses are stabilized, P&G will focus on expanding in only its 10 largest emerging markets.
Moeller said the company has no plans to pull out of any category-country combination and will maintain its growth in emerging markets.
"In terms of level of activity, it's just being a little bit more deliberate and ensuring we have sufficiency before we push the button for the next expansion," Moeller said.
Citi Investment Research analyst Wendy Nicholson said P&G's strategy to expand its footprint in emerging markets is critical for its success, but it may have been more costly than expected.
"We like that Procter & Gamble has no intention to admit defeat and withdraw from any country-category combination," she wrote in a note to investors. "That said, Procter & Gamble told us today that they plan to take a more measured approach with respect to new market expansion - with the goal that this initiative is more successful at `self-funding' than it has been in the past."
The moves announced Wednesday are in addition to P&G's current restructuring plan aimed at lowering costs, cutting jobs and saving $10 billion by the end of fiscal 2016.
Procter & Gamble shares ended the day down 76 cents at $62.39 and fell another 4 cents after hours.