Procter & Gamble is replacing chief executive Bob McDonald with his predecessor, A.G. Lafley, as the world’s largest consumer-products maker struggles to rekindle growth at home and abroad.
McDonald embarked on a turnaround plan last year to cut $10 billion in costs through 2016 and renew focus on the company’s leading businesses after losing market share to such rivals as Unilever. Activist investor Bill Ackman bought a stake valued at $1.8 billion last year and pushed to replace McDonald.
P&G’s shares advanced 4 percent Friday, to $81.88, the stock’s biggest one-day gain since October 2009.
Lafley, 65, who started working at the Cincinnati-based company in 1977 and served as president and CEO from 2000 to 2009, will succeed McDonald immediately, P&G said. McDonald, 59, will retire on June 30 after 33 years of service and won’t receive any severance payments, the company said.
“The board called me and asked me if I would come back, and frankly, duty called,” Lafley said in a telephone interview. “I’m back. I’m full on, I’m engaged, and I’m ready to get into the business.”
Lafley, who will earn a base salary of $2 million a year, said he plans to continue McDonald’s turnaround plan.
— Bloomberg News
l Abercrombie & Fitch’s shares tumbled 8 percent Friday, to $50.02, after the company posted first-quarter earnings. For the period that ended May 4, the company lost $7.2 million, or 9 cents a share. That’s a bigger loss than the 5 cents Wall Street had expected, though smaller than last year’s loss of $21.3 million. The company has been fighting backlash from comments made by chief executive Mike Jefferies seven years ago in an interview with Salon.com, which have recently gone viral. Jefferies had said Abercrombie wanted to sell only to attractive kids and that some people didn’t belong in Abercrombie clothes. His comments have led to letter-writing campaigns and boycotts over the past week.
l Orders for durable goods increased more than forecast in April, indicating the U.S. economy will get a lift in the second half of the year as business investment strengthens. Bookings for equipment meant to last at least three years increased 3.3 percent last month after dropping 5.9 percent in March, the Commerce Department said Friday. The gain in bookings last month was boosted by a rebound in demand for commercial aircraft. Aircraft orders climbed 18.1 percent in April after slumping 43 percent the prior month.
l A plan by American Airlines’ parent to exit bankruptcy and merge with US Airways Group is coming under fire from the Department of Justice because of nearly $20 million in severance pay earmarked for outgoing boss Tom Horton. In court papers filed Friday in U.S. Bankruptcy Court in Manhattan, U.S. Trustee Tracy Hope Davis, the department official charged with regulating bankruptcy cases in the New York region, said the severance deal for AMR’s chief executive violates bankruptcy law. She asked the court not to approve the outline of the plan, which also must be approved by AMR creditors.
l News Corp. said its board of directors has approved plans to split its entertainment and publishing businesses into two separate companies. The company also adopted a shareholder-rights plan designed to prevent a hostile takeover in the volatile trading period after the split is complete. News Corp. said that the target date for the split is June 28. The company holding its TV and movie properties will be 21st Century Fox; The new News Corp., a smaller entity, will be focused on newspapers and publishing.
— From news services
l In Sunday Business: Low interest rates are the final straw for many company pensions.
l On Monday: U.S. markets will be closed for Memorial Day.