P&G ‘Pushing Forward’ for Coronavirus; Unveils 24-Hour Cleaner
P&G, which is currently facing supply and demand challenges associated with the coronavirus, launched a line of multipurpose cleaners promising 24 hours of bacteria protection.
At the Consumer Analyst Group of New York Conference last week, P&G shared an update on the company’s outlook and strategy for navigating the virus outbreak. Given that China is the company’s second largest market in sales and profit, both top- and bottom-line results for its 2020 fiscal third quarter in that region — and for the total company — are expected to be materially impacted.
CFO Jon Moeller said that while some demand has shifted online, supply of delivery operators and labor is limited, and the company is experiencing declining traffic from store closures and reduced hours. Impacts outside of China are also having an effect, including global supply, travel and substantial traffic decreases in Asian metro area department stores.
“We access 387 suppliers in China that ship to us globally more than 9,000 different materials, impacting approximately 17,600 different finished product items,” said Moeller. “Each of these suppliers faces their own challenges in resuming operations. The operating challenges change with the hour, and of course the path of the virus is unknown, making it very difficult to provide precise estimates of impact.”
“We continue to believe, based on what we know today, that our fiscal year top and bottom line guidance ranges—and I emphasize ranges—remain the right ones,” said Moeller. “We will continue to monitor the situation and obviously update you if and when a different reality becomes apparent.”
During the conference, P&G chairman, president and CEO David Taylor recapped the progress the company had made in its plan to return to growth, and noted that the first half of fiscal year 2020 had been a strong start in sales, earnings per share and cash generation. In discussing the company’s plans for navigating the coronavirus, Moeller said doubling down on these strategies would enable P&G to deal with near-term macro, operational and competitive challenges.
“They are a foundation for strong, balanced growth and value creation over the short, mid and long term,” said Moeller. “The best response is to push forward, not to pull back. And that is exactly what we intend to do.”
The company this week introduced a line of multipurpose cleaners and sanitizing sprays promising to provide 24 hours of protection from bacteria growth. (Though it does not specifically reference coronavirus.) The Microban 24 cleaners kill 99.9% of bacteria in 5 minutes and protect surfaces even after multiple touches.
Three products are now available at major retailers: a sanitizing spray, a multi-purpose cleaner and a bathroom cleaner. While they’re designed for everyday use, they’re not meant to be used on food contact surfaces.
P&G reported net sales of $18.2 billion in its fiscal second quarter, up 5% from the prior year. It saw sales growth in its health care category (up 14%), as well as beauty (up 7%) and fabric and home care (up 4%).
The company is No. 2 on the CGT list of the 2019 Top 100 Consumer Goods Companies.