Procter and Gamble Environmental Issues

The Procter and Gamble baby care offices stand at P&G's headquarters in Cincinnati, Ohio,.Luke Sharrett | Bloomberg | Getty Images

The Procter and Gamble baby care offices stand at P&G's headquarters in Cincinnati, Ohio.

Many are asking whether P&G's troubles are theirs alone or challenges the industry is facing. The answer is it's both.

Read More Procter & Gamble cuts outlook on emerging market currency impact

There is no question consumer products companies are facing major headwinds, including a sluggish recovery in consumer spending in developed markets like the U.S. and uncertainty on growth in emerging markets, along with sharp swings in foreign exchange rates, which cut into overseas earnings.

Earnings in the sector have been disappointing across the board. Thursday, L'Oreal, the world's largest cosmetics company, missed estimates saying it was "held back by a sluggish American market." Colgate-Palmolive sales missed its estimates, with North American sales up only 1 percent in the quarter. Kimberly-Clark, which makes Huggies and Kleenex, cut its outlook last week.

Unilever, the company behind Lipton tea, Dove soap, and Ben &Jerry's ice cream, missed sales estimates as well. CEO Paul Polman said, "We have experienced a further slowdown in the emerging countries, while developed markets are not yet picking up."

Read MoreProcter & Gamble provides protection in down markets: Pro

Clearly, the industry is struggling and has yet to participate in the broader economic and recovery in consumer spending.

Something else wrong?

Despite the tough macro environment, analysts who cover P&G say, many of the problems the company is facing are self-inflicted.

Since Lafley's return, none of the main categories—baby, feminine & family care; global beauty; global fabric and home care; and global health and grooming—are firing on all cylinders.

He has pursued deep cost cuts to boost productivity and profits, cut a $2.9 billion deal to sell off pet food business, launched a review of factory operations and operations and focused on innovation, rolling out new products like Gillette's Fusion ProGlide razor. And he is still pursuing a sale of the pet-care business in Europe.

Now, the company says it will keep only 70 to 80 brands and divest or discontinue the rest—some 90 to 100 brands—over the next 12 to 24 months to help narrow its focus and cut even more costs.

"After a year in, many things internally have changed, but the results haven't, " said Ali Dibadj, an analyst at Sanford C. Bernstein. "Changing a big company is slow, but this feels like something else might be wrong."

Looking back at last year, Lafley "could have underestimated the toughness of the global consumer environment, reinvestment needed to halt share losses where consumers have turned to value, how much better competitors have become and how quickly the development of retail is undermining the advantage scale provides when distributing in China, and Russia, " said Consumer Edge Research analysts in a note published ahead of earnings.

Read MoreMars to buy most of P&G's pet food business for $2.9 billion

Analysts said there are also fundamental issues that make it harder for P&G to grow in this environment, including the company's lack of local manufacturing presence, which has saved competitors like Unilever money on labor and production costs and has pressured P&G's margins. Some products sold in Brazil, for instance, are made in Europe, according to analysts.

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