Procter & Gamble Unearthes Efficiencies to Buoy Brand Spending and Support Its Stalwart Edge

Tempered sales have characterized the last few quarters for wide-moat Procter & Gamble, with the firm posting low-single-digit organic sales growth in each period, lagging the mid- to high-single-digit marks that had more recently characterized the business. This was initially a byproduct of more muted price increases (low single digits, down from 7% in the first quarter of 2024). However, we don’t believe this suggests cracks in the firm’s competitive prowess. After rightsizing its category and geographic reach by shedding around 100 brands beginning about 10 years ago, P&G also embraced a more holistic approach to brand investing (consisting of how a product performs, the packaging, brand messaging, execution in stores and online, and the value a product offers its retail partners and consumers). And we believe 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 their clout with retailers and consumers, supporting its wide moat over the long term.