Household products giant Procter & Gamble Co. is hoping its former CEO can work his magic once again.
The Cincinnati company said late Thursday that former CEO A.G. Lafley, a 33-year industry veteran, is returning its top post. The surprise move comes as the world’s largest consumer-products maker tries to spur growth in the face of stiff global competition.
Lafley, 65, replaces CEO Bob McDonald, effective immediately. McDonald, who will retire June 30 after a transition period, has served as CEO since 2009.
Lafley, who led P&G from 2000 to 2009, also is taking the president and chairman titles.
Traders appeared to approve of the move. Procter & Gamble shares rose $3.18, or 4percent, to $81.88 in trading Friday.
The 175-year-old company’s Tide detergent, Crest toothpaste and other products can be found in 98 percent of American households. But it is struggling to grow.
In his first stint at the helm, Lafley helped right an ailing P&G, emphasizing innovation and a “consumer-is-boss” focus. He also pulled off the blockbuster $57 billion acquisition of the Gillette Co. in 2005, expanding P&G’s reach into male-oriented products with Gillette’s shavers and razors.
P&G is known for its premium products that cost more than competitors but are perceived by customers to be of higher quality. But growth for the company has slowed in developed markets like North America and Europe.
In order to spur growth, P&G has been cutting costs and rolling out new products. The company is in the middle of a belt-tightening plan aimed at saving $10 billion by 2016. And it has introduced new products or brand expansions.
But investors have been frustrated by the company’s slow revenue growth and stagnant market-share gains globally. The pressure stepped up last July, when activist investor William Ackman took a 1 percent stake. He has been vocal about the company’s need to streamline operations and improve results.
The company’s most recent moves seem to be working.
In P&G’s most recent January-to-March quarter, net income rose 6 percent to $2.57 billion, as revenue inched up 2 percent to $20.6 billion. But that fell slightly short of analysts’ expectations of $20.72 billion. It had also begun to gain market share in North America. But fourth-quarter guidance was below expectations as the company spent more to market new products.
Lafley said the board approached him “very recently” after McDonald decided to retire and asked him to reclaim the top spot.
“Frankly, duty called,” he said in an interview with The Associated Press. “I’m back, I’m full on.”
Procter & Gamble has roughly 12,000 employees in southwest Ohio. It is a major contributor to area communities, and its executives sit on many area boards.
Count on us for continuing coverage of A.G. Lafley’s performance as CEO of Procter & Gamble.