trending Market Intelligence /marketintelligence/en/news-insights/trending/eO0Gw643KwC36I9BOwQ_lA2 content
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

Thank you for your interest in S&P Global Market Intelligence! We noticed you've identified yourself as a student. Through existing partnerships with academic institutions around the globe, it's likely you already have access to our resources. Please contact your professors, library, or administrative staff to receive your student login.

At this time we are unable to offer free trials or product demonstrations directly to students. If you discover that our solutions are not available to you, we encourage you to advocate at your university for a best-in-class learning experience that will help you long after you've completed your degree. We apologize for any inconvenience this may cause.

In This List

Procter & Gamble more prepared for recession than in '08, CFO says

Gauging Supply Chain Risk In Volatile Times

S&P Global Market Intelligence

Cannabis: Hashing Out a Budding Industry

Segment

IFRS 9 Impairment How It Impacts Your Corporation And How We Can Help

The Market Intelligence Platform


Procter & Gamble more prepared for recession than in '08, CFO says

The Procter & Gamble Co. is more prepared for an economic downturn than it was a decade ago, the consumer company's CFO said Oct. 22.

Changes to Procter & Gamble's business since the last recession, including a greater focus on products including laundry detergent and shampoo, should help the company avoid taking as large a hit as it did during the last recession, Vice Chairman, COO and CFO Jon Moeller said during a call to discuss the company's first-quarter results for fiscal 2020.

Procter & Gamble beat analysts' expectations for the quarter, reporting organic sales growth of 7% and raising guidance for its full 2020 fiscal year. The company's shares were up 3.8% in late morning trading at $123.55.

Fears of slowing global growth have spooked investors in recent months. The latest sign of trouble came Oct. 16, when U.S. retail sales declined for the first time in seven months against analysts' predictions.

After the housing and financial markets collapsed in 2008, P&G reported organic sales growth mostly in the low single digits, well below more recent sales growth trends. Although Procter and Gamble saw "no signs of weakness" in its categories during the most recent quarter, the company has made multiple changes since the last recession to soften the blow of another downturn, Moeller said.

In recent years, the company has shed brands it considers discretionary and focused on essential products that consumers buy even when household budgets tighten, he said.

Procter & Gamble sold 43 beauty brands to Coty Inc. for $14.81 billion in October 2016. At the same time, the company has purchased smaller brands focused on products that see daily use. These include Native deodorant, which the company acquired in November 2017 for $100 million.

"Generally, we don't see consumers stopping laundry or shampooing or conditioning or feminine protection during a recession," Moeller said.

Adding products with features that differ from those of its competitors and introducing new items at different price points also could help during a recession if customers look for value-priced alternatives to the largest brands, he added.

"We have seen continued sequential improvement on the margin," Moeller said of P&G's first quarter.

"But that can change pretty quickly, as we've all witnessed during our lifetimes," he added.

The company has posted above-forecast earnings in recent quarters. Before the fourth quarter of fiscal 2019, the last time organic sales grew 7% was 2006.

Strong top-line and bottom-line results will make for tougher comparison points going into the rest of 2020, Moeller said.

All five of the company's product categories grew sales on an organic basis during the quarter, with beauty growing the fastest at 10%. Grooming posted a 1% sales increase — the slowest of all five divisions.

Grooming, which includes P&G's Gillette razor brand, has posted sales in recent years that have lagged the company's other categories. Speaking during the post-earnings call, Moeller said Procter & Gamble is attempting to improve grooming product sales in developing markets, as well as encouraging more shaving in developed economies by introducing more razors with skin-protecting features.