Procter & Gamble (P&G) reported a 2% drop in sales year on year in its third-quarter earnings call today.
CFO Andre Schulten said that results were heavily affected by consumer volatility, with consumption levels down across the US and Europe. But the FMCG company seems optimistic about the future.
‘The long-term focus on the strength of our brands, business and categories is the best way to position ourselves for stronger growth when the economic climate and consumer confidence improve. This starts with strong innovation plans,’ Schulten said.
When asked by an analyst about the nature and level of investments P&G will put behind these innovation plans, Schulten said that spending will change as plans unfold. ‘But the one thing that is very clear to us is we continue to be committed to fully support the innovation across the fourth quarter,’ he added.
Schulten shared good news for advertisers as he said that strong communication can best support the company’s innovation plans: ‘Media advertising to our consumers is the primary vehicle of investment. I don’t view us shifting the mix between advertising and trade promotion.’
Consumer behaviours
Another analyst question touched on the growing anti-US sentiment across different markets and whether it has impacted the US brand.
Schulten admitted that while the company is ‘paying very close attention to social media’ and has seen noise in certain markets, it has ‘not observed in data that there is an impact in terms of nationalistic consumer behaviour.’
According to him, P&G’s products have been on the shelves of global markets for decades, so consumers ‘view them as local brands that they grew up with.’
‘I think that’s the case in Europe, that’s the case in China, and even in Canada, where the noise level is the highest,’ he said.
Featured image: P&G headquarters / P&G media centre
