Procter & Gamble Earnings: More Muted Sales Growth Doesn’t Reflect a Stained Brand Mix; Shares Rich

For the first time in more than 20 quarters, Procter & Gamble posted just 3% organic sales growth, lagging the mid- to high-single-digit marks that have more recently characterized the business, primarily on the heels of less price contribution (3%, down from 7% in the first quarter). However, we don’t believe this signals cracks in the firm’s competitive prowess. From where we sit, P&G’s strategic aims—investing in product innovation and marketing to support its portfolio of daily use, essential offerings—should ensure its brands maintain clout with retailers and consumers. We believe the prudence of these aims manifest in the robust 7% growth posted in its European focus markets—where volumes increased 4% on 3% higher prices—a market with outsize private-label share.