The Procter & Gamble Company: Costs Aren’t Coming Out in the Wash

研报英文原文证据摘录

The Procter & Gamble Company: Costs Aren’t Coming Out in the Wash

gas prices or incremental $100 of gas cost

per week - continues to look for smaller pack sizes. They continue to be very affected by

promotion patterns.” PG’s customer base is “skewed to the >$100k than it is to the <

$50k,” so the softness reflects “discernment by consumers, not an inability to buy.” That

demographic mix insulates PG’s volume base better than peers skewed to lower-income

shoppers.

• Innovation-led core growth still favors scale. PG’s Tide Original Liquid was

highlighted on the call for having a same-price performance upgrade on >25% of Tide’s

user base, that went from declining to +HSD%, beating management’s own expectations.

This is constructive for CL and KMB, which run the same superiority-plus-productivity

playbook. However, we believe this is tougher for CLX, which has a narrower portfolio

and incremental pipeline, as well as for COTY, which lacks the productivity engine to

fund this level of reinvestment.

• Value/price-point interventions are back. PG is correcting price gaps in Baby Care and

Family Care compared to private label. It also flagged promotion normalizing to pre-

COVID levels (Europe volume-on-promo +5pts). We read this as margin-negative for

names without an innovation offset - CLX in commoditized cleaning and COTY in mass

beauty.

• Middle East cost pass-through differentiates on supply-chain scale. PG estimated the

FY27 headwind at ~$1bn after-tax and called out competitors with long, contract-

manufactured supply chains as more exposed. CLX and COTY carry higher commodity

beta on a smaller EBITDA base with less reformulation flexibility. CL’s supply chain is

the closest to PG’s, but its thinner margin structure amplifies the same absolute cost

impact.