Growth Initiatives and Outlook for Consumer Goods Companies


Dec. 4 2020, Updated 10:53 a.m. ET

EPS guidance

CPG (consumer packaged goods) companies Procter & Gamble (PG), Colgate-Palmolive (CL), Clorox (CLX), and Kimberly-Clark (KMB) have a presence outside the US. This makes them vulnerable to foreign exchange translations. During the calendar 3Q15 earnings release, Procter & Gamble maintained its guidance for the core EPS (earnings per share). It was slightly below the mid-single digits compared to the restated core EPS of $3.76 in fiscal 2015.

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Procter & Gamble’s EPS guidance is revised due to the impact of moving earnings from the beauty categories it plans to exit to discontinued operations. To learn more about Procter & Gamble’s divestiture of the beauty segment to Coty (COTY), read Coty Buys 43 Procter & Gamble Brands: What Investors Should Know.

Clorox (CLX) continues to anticipate fiscal 2016 diluted EPS from continuing operations of $4.68–$4.83. Kimberly-Clark’s (KMB) adjusted EPS should be $5.70–$5.80 compared to the company’s previous guidance of $5.65–$5.80.

Expand distribution

In order to drive growth, Colgate-Palmolive (CL) and other companies reinvested savings. They targeted innovation, technology, digital engagement, and emerging markets. Colgate aims to expand its distribution in distant rural areas of India through a hub-and-spoke system. The company uses vans to map state-by-state opportunities through a sales representative.

Value creation

Procter & Gamble also aims to focus on value creation. For example, shifting the focus from low-tier conventional tissue products to premium-tier differentiated products in Mexico will reduce sales by nearly $75 million—over 1% of global category sales. The profit will increase by more than $30 million.

Procter & Gamble has exposure in the iShares Dow Jones U.S. ETF (IYY). It accounts for ~1.0%[1. Updated as on January 5, 2016] of the portfolio’s total weight.

To learn more about Procter & Gamble’s updates on growth and transformational moves, read A Procter & Gamble Investor Update: Growth and Transformational Objectives.

For more industry updates and analysis, please Market Realist’s Consumer Products page.


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