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Can Procter & Gamble (P&G) Offset A $1.3 Billion Oil Headwind Through Productivity Alone?

Procter & Gamble Company’s latest quarterly discussion reflected a clear improvement in organic sales momentum, but also showed a more complicated cost and margin backdrop heading into the next fiscal year. Organic sales increased more than 3%, with volume contributing 2 points, pricing adding 1 point and mix flat. Growth was broad-based across all 10 product categories and all 7 regions, with North America up 4%, Greater China up 3%, enterprise markets up 5% and Latin America up 5%. Management indicated that roughly 1 point of growth shifted from the fourth quarter into the third quarter due to timing and inventory effects, so the fourth-quarter growth rate is expected to be lower than the third quarter. The key positive was that several brand interventions are beginning to show results. Management highlighted product and communication improvements in Tide liquid detergent, SK-II, Baby Care in China, Fairy, Mr.