P&G Reports Flat Sales as Consumer Spending Remains Tight
Procter & Gamble (P&G) posted flat quarterly sales and a dip in volume as global demand for household staples continues to face headwinds from cautious consumer spending. Organic sales rose by 3% in the quarter ending March 2024, but overall net sales stood at $20.2 billion—essentially unchanged from the same period last year, according to the company’s latest earnings report.
The FMCG giant has leaned heavily on price hikes over the past year to offset cost inflation and support margins. However, the latest results suggest that higher prices may now be testing shopper tolerance, with volumes slipping 2%—the third consecutive quarter of declines in that metric. CFO Andre Schulten acknowledged the ongoing volume pressure but indicated stabilization across multiple categories globally.
P&G faces a challenging landscape, particularly in key markets like the United States and China. U.S. consumers are showing signs of trading down or delaying purchases in categories like home care and personal grooming, while in China, recovery is sluggish amid economic uncertainty. These dynamics weighed on the company’s grooming and baby care segments.
Despite the muted topline growth, P&G raised its full-year profit outlook, citing continued productivity improvements and favorable commodity costs. The maker of Tide, Pampers, and Gillette now expects core EPS growth of 10–11% for the fiscal year, up from its prior estimate of 8–9%.
The results reflect broader challenges facing FMCG brands: balancing price with volume while navigating evolving consumer behavior. Inflation-driven pricing strategies brought short-term gains, but brands are now being forced to recalibrate as price sensitivity intensifies. Schulten noted that promotional activity is gradually returning in some markets, hinting at a more competitive environment ahead.
With consumer wallets still under pressure and promotional pricing making a comeback, brand strength and perceived value will be critical levers for growth. P&G’s ability to hold share while volumes taper will be closely watched as an indicator of category health and pricing elasticity across the FMCG sector.