Shares of consumer goods conglomerate Procter & Gamble have plunged to a new annual low following sobering comments from the company’s finance chief regarding U.S. consumer sentiment. The remarks have cast a shadow over the crucial holiday shopping season, even as company leadership maintains its long-term financial targets remain intact.
A Stark Assessment of the U.S. Consumer
Speaking at the Morgan Stanley Global Consumer & Retail Conference, Chief Financial Officer Andre Schulten delivered a cautious message. He characterized the current U.S. market environment as the most volatile witnessed in years. A key concern highlighted was a noticeable decline in October sales across core household product categories, with both volume and value seeing a dip. Schulten indicated he does not anticipate any material improvement for November compared to these weak October figures.
According to the CFO, this trend is driven primarily by increasingly cautious consumers and intensifying competitive pressures. Additional headwinds include the reduction of government assistance programs, such as SNAP benefits, and challenging comparisons to the previous year’s performance. The market reaction was swift and severe: the stock dropped to a new 52-week low of 124.82 euros, a level approximately 25% below its peak for the year.
International Markets Provide a Buffer
Despite the concerning U.S. outlook, management offered a significant point of reassurance. Schulten emphasized that the company’s existing financial guidance for fiscal year 2026 already incorporates these challenging conditions. Procter & Gamble is therefore reaffirming its projections:
Should investors sell immediately? Or is it worth buying Procter & Gamble?
- Organic sales growth: Unchanged to up 4%
- Core earnings per share: Growth of up to 4%
This confidence is underpinned by stronger performance in international operations. Management pointed to resilient demand in regions including China, Western Europe, and Latin America, which is currently helping to offset domestic softness.
Wall Street’s Measured Response
Analyst sentiment remains largely, though cautiously, positive in the wake of the update. Several financial institutions, including Barclays and Bank of America, have adjusted their price targets downward but continue to see potential for share price appreciation. Concurrently, the company is advancing a major restructuring initiative aimed at streamlining operations. The plan, which involves cutting around 7,000 positions, is designed to reallocate resources toward new growth areas.
For investors, the situation presents a mixed picture. The recent share price decline has pushed the dividend yield to a historically attractive level near 3%. However, the coming quarters will be a critical test of whether the company’s international segments can sustainably compensate for the prolonged consumer pullback in its home market.
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