:max_bytes(150000):strip_icc()/GettyImages-2227176309-6463cc7764b94fbcbb4654be19965108.jpg "Why Procter & Gamble Stock Hit a 2-Year Low on Tuesday")
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Key Takeaways
- Procter & Gamble’s CFO said Tuesday that the consumer product maker was seeing a “nervous and cautious” consumer in recent months.
- Tariffs and the government shutdown have exacerbated the “tougher context” for sales in the U.S., CFO Andre Schulten said.
Procter & Gamble (PG) shares hit their lowest point in two years on Tuesday after the consumer goods giant’s finance chief issued a warning about the health of the American economy.
“I think the context in the US is more volatile, probably the most volatile we’ve seen in a long time,” said P&G CFO Andre Schulten when asked at a Morgan Stanley conference about the state of the packaged goods business.
Sales appeared to be down “significantly” in both volume and value in October, said Schulten, who added he didn’t expect November’s results to be “materially different.”
“We knew the consumer was more nervous and cautious” coming into the quarter, and that a port strike last year that led customers to stockpile goods would make for tough year-over-year comparisons, he said. The government shutdown and delay of some SNAP benefits also weighed on sales.
Why This Matters to Investors
Procter & Gamble makes dozens of products across several industries that American consumers use every day, from Dawn dish soap to Tide and Gain laundry detergents and Pampers diapers. The company is uniquely positioned to comment on the health of the American consumer, considering the range of essentials it sells.
Shares declined as much as 3% on Tuesday morning to trade at their lowest level since December 2023. The stock pared its losses and finished the session 1.1% lower.
Procter & Gamble has made a slew of changes this year. It announced a restructuring effort in June that would include layoffs of 7,000 employees and potential exits from certain sectors, and named a new CEO in July.
Last month, Schulten said that the company was seeing the most sales growth in the high end of its product lines, suggesting that higher-income households were “trading up” to premium products, while middle and lower-income consumers stretched budgets and opted for cheaper store brand products.
