PGs Shaving Operations – US-FOREX.US
During a time in which consumers haven’t been buying as much-and seeking out cheaper store brands when they do-even companies selling consumer staples, like Procter & Gamble, are streamlining.Having a portfolio of popular brands is a mixed blessing in the current economic environment, since consumers often associate well-known labels with higher prices. Although some expect Procter & Gamble
, the company behind Tide, Charmin and Pantene products, to put underperforming brands or its pharmaceutical business on the chopping block as part of its fat-trimming efforts, the company recently acquired two upscale men’s grooming lines: The Art of Shaving and Zirh. “While these premium-priced products will likely be margin accretive for the company, is the timing really ideal to take a bigger position in premium personal care, given that PG’s mass-market portfolio is already priced at over a 20% premium on a weighted-average basis?” asked Citi analyst Wendy Nicholson. She estimates a sales drop of 9.3% for the fourth quarter, extending from the previous quarter’s 8.9% dip, with grooming, beauty and health care segments looking the weakest. Foreign exchange rates and increased promotional spending are also projected to drag on the quarter’s revenue.Analysts polled by Thomson Reuters have been anticipating fourth-quarter earnings of 79 cents a share on sales of 19.3 billion when the Cincinnati-based company releases its report on Wednesday.Investors will be eager to hear from P&G’s new chief executive, Bob McDonald, who took over from A.G. Lafley on July 1, on his plans for the company and his expectations for the coming year. Shares across the consumer staples segment traded in the red on Tuesday afternoon. Arm & Hammer products company Church & Dwight
raised its year-end outlook to between 3.35 and 3.40 a share, from between 3.30 and 3.35, previously, while Clorox
took a cautious tone regarding sales in the current quarter as it upheld year-end guidance, tainting better than expected fourth-quarter earnings. Church & Dwight’s stock shed 97 cents, or 1.6%, to 58.05 while Clorox shares slipped 29 cents, or 0.5%, to 58.71 and P&G’s stock was down by 16 cents, or 0.3%, at 55.45. Johnson & Johnson
lost 26 cents, or 0.4%, to 60.84 and Colgate-Palmolive
was down by 2 cents to 72.11. The Consumer Staples SPDR
exchange-traded fund was down by a penny, or 0.4%, at 24.54 during Tuesday’s afternoon trading session.The Associated Press contributed to this article.