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P&G Attractive Despite Tepid Results

The firm is laying the foundation for solid gains as sales are hampered by competitive pressures.


Erin Lash: On the surface, Proctor and Gamble's fourth-quarter and full-year results left little to cheer about, with organic sales growth tapping in at just 1% and margin contraction at both the gross and operating income lines. However, we think the firm is laying the foundation for more solid gains longer term.

Sales continue to be hampered by intense competitive pressures in both its grooming and baby business, which were each down 2% to 3% on an organic basis. However, the remainder of its mix both did sales gains north of 3%, which we think evidences the efforts the firm has taken to eliminate and rationalize its brand mix and focus its resources on its highest return opportunities.

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Erin Lash does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.