THE FACT THAT? Procter & Gamble warned that U.S. sales in key categories in which it competes fell significantly in October and are expected to show similar declines in November, indicating pressure on consumer spending ahead of the Christmas period.
THE DETAILS At a Morgan Stanley conference, P&G Chief Financial Officer Andre Schulten reported that U.S. category sales fell significantly in both volume and value, describing the environment as the most volatile the company has seen in years. Schulten pointed to a combination of more cautious consumers, intensified competitive activity and unexpected macroeconomic factors, including a government shutdown and disruptions to SNAP food assistance, as factors contributing to the slowdown. While the weakness is expected to weigh more heavily on the current quarter than on full-year performance, the comments sent shares of P&G and several peers down. Schulten also reiterated the company’s continued interest in bolt-on acquisitions, citing Native as a successful example, and highlighted the continued focus on scaling smaller health and beauty brands in the $50 million to $150 million range.
THE WHY? The update highlights growing pressure at the category level in the US mass market, underscoring a more challenging near-term demand landscape for beauty, personal care and home brands that rely on value-sensitive consumers.
Fountain: Bloomberg
