P&G Growth Stalls With US Government Shutdown Hurting Sales

Procter & Gamble Co.’s growth in a key sales metric stagnated in the latest quarter while volume slipped, showing that US consumers spent cautiously in the final months of the year.

The maker of Pampers diapers and Tide detergent reported flat organic sales, which exclude the impact of currency volatility and acquisitions, in the latest quarter. That’s the slowest pace in a decade and slightly below the average estimate of analysts. Volume dropped by 1 percent, dragged down by declines in baby, feminine and family care products.

P&G Chief Financial Officer Andre Schulten said sales will rebound during the next six months. The latest quarter faced a tough comparison to a year earlier, when US consumers stockpiled on essentials such as toilet paper and detergent ahead of port strikes. The latest quarter, which ended Dec. 31, was also hurt by the government shutdown and the temporary pause of food aid.

The quarter is “really the base for inflection for growth in the second half,” Schulten said in an interview with Bloomberg News.

The company’s stock declined as much as 1.1 percent in premarket trading on Thursday. The shares fell nearly 15 percent last year, while the S&P 500 Index posted a 16 percent gain over the same period.

P&G still expects to meet its guidance for organic sales growth in the current fiscal year, which runs through mid-2026. That’s in part because the company is already seeing strong growth in regions such as Europe and Latin America, where organic sales rose 8% in the most recent quarter, Schulten said.

P&G’s revenue in those regions, where the company has tested new products and marketing, “gives us comfort that we will see a level of acceleration in sales growth both in the US and continued acceleration outside,” Schulten said.

He added that a new formula for Tide detergent, which hit the US market at the end of the year, is selling well.

Nonetheless, the sluggish quarterly results add pressure to Chief Executive Officer Shailesh Jejurikar, who took over on Jan. 1, to ensure P&G delivers on its pledge for a rebound in the coming months.

When the Cincinnati-based company first issued its annual guidance for organic sales in July, executives said the range was intentionally wider than they normally forecast because of the high level of uncertainty about new tariffs and how US consumers would respond. P&G sees organic growth in a range of flat to rising 4 percent.

In a bid to bolster growth, P&G is cutting some prices and adjusting its package sizes to appeal to more cost-conscious shoppers. Overall, the company’s prices rose 1 percent in the latest quarter — consistent with recent quarters.

“We need to have the right affordability, the right level of price offer for every consumer that considers the P&G portfolio,” Schulten said. He declined to comment on future price increases.

By Jeannette Neumann

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