The company attributed the results to inventory reductions by American retailers.

"The company has got a credibility problem to some degree," she said, adding that the latest inventory reduction seems ill timed.

Gillette says the inventory reduction was always meant to be gradual.

Lean companies always make significant inventory reductions and the accounting reports show negative results.

The company also said the 1987 amounts have been adjusted to reflect a $236,760 inventory reduction.

The initial estimate included an inventory reduction of only $7.1 billion.

Sales in the 1997 quarter were depressed by a one-time inventory reduction carried out at that time.

This inventory reduction is the second consecutive decrease of almost ten percent in charge inventory.

In the past, inventory reductions at this pace have always signaled strong rebounds in production within a few months.

Potential benefits include efficient business process, inventory reduction, and lead time reduction.