Procter & Gamble

Anyone have a strong view on how the SK-II brand recovery in China plays out this year? Skin and Personal Care is a meaningful segment and SK-II got hit hard by the backlash following Japan's Fukushima water release controversy. Curious if the recovery has legs or if the brand damage is more permanent in that market.

What's interesting about PG's pricing strategy over the last two years is that they pushed through double-digit price increases across most categories and largely held them even as input costs like pulp, resin, and energy came down. That gap between cost deflation and sticky consumer pricing is basically being pocketed as margin expansion right now.

Procter & Gamble reported fiscal Q2 2024 organic sales growth of 4% but net sales were essentially flat due to currency headwinds, particularly in markets like Argentina and Nigeria. The company reiterated full-year organic sales growth guidance in the 4-5% range. Foreign exchange remains a meaningful drag given how much revenue comes from outside North America.

At roughly 24-25x forward earnings PG is priced for perfection in a category that's facing real volume pressure. Unilever has been restructuring aggressively, Colgate is taking share in oral care, and Henkel is competing hard in Europe. The premium valuation made more sense when rates were near zero.

Fabric and Home Care is carrying a lot of weight right now — Tide, Downy, and Febreze all holding pricing power while private label alternatives struggle to close the quality gap. Organic sales growth in that segment has been remarkably resilient even as volumes dipped slightly. The brand moat here is genuinely hard to replicate.

Grooming segment keeps getting squeezed — Gillette has been losing ground to Dollar Shave Club and Harry's for years and the premium razor category just isn't growing. They took that massive write-down on Gillette back in 2019 and the structural pressures haven't really changed. Hard to get excited about a segment that feels permanently on defense.

Does anyone actually model the Health Care segment separately? Between Oral-B, Vicks, Metamucil, and Pepto-Bismol, it feels like a collection of durable consumer health brands that could arguably command a higher multiple as a standalone. Has there ever been serious analyst discussion about spinning that out?

PG announced it is expanding its manufacturing footprint in India with a new facility focused on Home Care and Baby Care products, as part of a broader effort to localize production and reduce logistics costs in high-growth markets. India has become one of the company's top 10 markets by revenue. The investment signals confidence in long-term demand even as near-term consumer spending in India remains uneven.

The Pampers and Always businesses in emerging markets are still in early innings of penetration — middle class growth in Southeast Asia and Sub-Saharan Africa is a multi-decade tailwind for Baby, Feminine and Family Care. Most people treat PG like a mature slow-grower but there's a real growth story in markets outside the US that doesn't get enough attention.