Sales drop seen with P&G brand consolidation

PROCTER & Gamble’s planned sale of 100 brands is expected to push down sales by about $11 billion or 14%.  

 

The move, which follows the sale of 35 of the company’s brands, is part of efforts to consolidate brands. Initial projections place sales reduction resulting from the initiative at 10%. Further decline in sales is scaring investors, however, as reflected in the 1.22% dip in shares as at yesterday’s close of trading.

 

Despite investors’ concerns over depressed sales, analysts agree the brand consolidation will result in a structurally attractive brand lineup for the company. P&G will have 65 leading brands in 10 key categories that play to its core strengths. 

 

P&G executives project low-to-mid-single-digit organic sales growth this year, with FX headwinds of negative 5%, and all-in sales growth of negative 3% to negative 4%.