P&G's Organic Growth Despite Market Volatility: Validation For Firm, Surprise For Analysts
P&G reported 7% organic and 1% net sales growth in latest quarter to $20.6bn. Analysts projected organic growth of 5.5% and saw results as indicator firm’s execution strategy, which includes cutting back on costs, is working.
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“A world in which all of the market growth is driven by pricing is obviously not sustainable,” CFO Andre Schulten acknowledged in P&G’s fiscal 2023 second-quarter earnings presentation. The firm remains focused on investing in its brands and driving household penetration while weathering economic headwinds and taking additional pricing in February.
Demand for OTC pain relievers and cough/cold products jumped prior to October-December and remained high during quarter due to consumer concern not only about flu but also RSV and additional COVID-19 mutation. US and Canadian firms marketing OTC drugs and supplements also will be offering additional signals on planned spinoffs of consumer health businesses.
After two quarters of reduced marketing spending, P&G’s top executives used Investor Day 2022 to highlight the efficiencies and higher effectiveness of digital marketing compared with traditional. “We would be missing the point of productivity improvement if we only measure the effectiveness of our brand building by the dollars we spend,” CFO Andre Schulten said.