P&G Slims Down to Push Profits Up

P&G efforts to shed around 100 brands indicates it's parting ways with its former self to become a more nimble and responsive player in the global consumer products arena

Erin Lash, CFA 30 November, 2015 | 2:05PM

Procter & Gamble (PG) is working to course-correct from entering too many new markets quickly and failing to bring new products to market that win with consumers, particularly emerging markets, where competitors already have a leg up.

Trusted manufacturers like P&G are critical to retailers, which are reluctant to risk costly out-of-stocks with unproven suppliers

However, P&G efforts to shed around 100 brands – more than half of its brand portfolio, which in aggregate posted a 3% sales decline and a 16% profit reduction the past three years – indicates it's parting ways with its former self to become a more nimble and responsive player in the global consumer products arena. We view this as important given the stagnant growth emanating from developed markets and the slowing prospects from emerging regions.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Procter & Gamble Co133.23 USD-0.65

About Author

Erin Lash, CFA  Erin Lash, CFA, is a senior stock analyst with Morningstar.

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