10 Best Consumer Staples Stocks To Buy Now

2. The Procter & Gamble Company (NYSE:PG)

Number of Hedge Fund Investors In Q1 2024: 69

The Procter & Gamble Company (NYSE:PG) is one of the biggest consumer goods companies in the world. This allows it to hold a dominant market position in several markets such as razor blades. The Procter & Gamble Company (NYSE:PG) is further helped by its vast brand portfolio, which is made up of nearly 80 different brands such as Gillette and Oral-B. These, coupled with a robust balance sheet made of $8.2 billion in cash and a stunning $62 billion in goodwill set up The Procter & Gamble Company (NYSE:PG) well to weather any major economic storm or downturn. At the same time, the heft also means that the firm has to keep matching investor growth expectations and maintain its volumes. Recent inflationary trends have presented it with ample opportunity to grow revenue by increasing prices. The Procter & Gamble Company (NYSE:PG)’s $82 billion in sales during fiscal 2023 marked a 15.6% growth 2020’s figures and helped set investor expectations. The firm is also well hedged against slowdown in China, as, unlike Estee Launder, China does not account for high double digit percentage of its sales. During the latest quarter, 9% of The Procter & Gamble Company (NYSE:PG)’s sales came from China, which limited the effect of a 10% drop in Chinese sales.

At the same time, since inflation is dropping, worries persist about The Procter & Gamble Company (NYSE:PG) being unable to maintain this growth trend. Additionally, higher prices mean less volume, and this was also the case during its Q3 fiscal 2024 earnings which saw volumes stay flat for the second consecutive quarter. During the accompanying earnings call, management shifted the talk to the firm’s Focus markets:

Focus markets grew organic sales 2% for the quarter, and Enterprise Markets grew 4%. Organic sales in North America grew 3% with 3 points of volume growth. Over the last 4 quarters, volume growth in North America has been plus 2%, plus 3%, plus 4%, and now plus 3%. These results include over a point of impact from retail inventory reductions, primarily in personal healthcare. Consumer demand for P&G brands remains very strong in the U.S., with all outlet consumption value growth of 5%, all outlet value share was up 10 basis points versus prior year. U.S. volume share was up 40 basis points, reflecting continued strong volume growth ahead of the underlying market. The gap between consumer offtake of 5% compared to our U.S. sales growth of 3% reflects the aforementioned trade inventory reductions in the quarter.

Europe focus markets were up 7% with 4 points of volume growth.