The maker of Tide laundry detergent, Crest toothpaste and a host of other well known household brands has faced major pressure from cheaper store brands and also felt the pinch as retailers cut back on goods they keep in stock.
At the same time, P&G's upscale products, such as perfume, have suffered as consumers shy away from small luxuries amid the recession.
But in a presentation at an analyst conference, P&G Chief Financial Officer Jon Moeller said the company expects organic sales to rise 1 percent to 4 percent in the second quarter, which starts in October, after being flat to down 3 percent in the first quarter. Organic sales excludes the impact of currency fluctuations, acquisitions and divestitures.
We clearly see that we are approaching an inflection point in P&G's organic sales trends, Moeller said.
P&G's sales comparisons get easier in the second quarter because year-earlier results were weaker, he noted.
I think the Street is going to be pretty happy that they are talking more optimistically about the second quarter, Edward Jones analyst Jack Russo said.
P&G's stock kind of looks like the ugly duckling compared with the rest of the market, he said.
Through Wednesday, P&G shares were down 13 percent this year, compared with an 8.8 percent increase for the Dow Jones industrial average .DJI, of which P&G is a component.
P&G said it still expects earnings per share from continuing operations of 95 cents to $1.00 for the fiscal first quarter. Analysts' average forecast is 97 cents, according to Reuters Estimates.
For the full year, P&G forecast earnings of $3.99 to $4.12 a share, including a one-time boost of 44 cents from the sale of its pharmaceuticals business to Warner Chilcott Plc. The forecast also includes 10 cents to 12 cents of dilution related to the transaction, the company said.
P&G CEO Bob McDonald also addressed the analyst conference, his first major appearance since he took over from A.G. Lafley on July 1. Lafley remains chairman.
McDonald said P&G wants to expand the number of consumers that use P&G products to 5 billion by fiscal 2015 from about 4 billion in the current fiscal year.
The company is looking to do this by offering more items at lower prices, especially in parts of the developing world like India, where McDonald said the company is focused on switching consumers from cloth diapers to a version of Pampers.
The company also wants global per capita spending on P&G products of $14 by fiscal year 2015, up from $12 this year.
U.S. consumers spend about $110 a year on P&G products, consumers in China spend about $3, and those in India spend about 60 cents, he said.
P&G shares were up $2.33 at $56.09 in morning trade on the New York Stock Exchange. (Reporting by Brad Dorfman and Jessica Wohl, editing by Gerald E. McCormick and John Wallace)