The chief executive of Club holding Procter & Gamble (PG) on Thursday said inflation appears to be easing and pressure from a strong U.S. dollar abating — comments that only reinforce our view that the consumer staples giant is a solid name to own in 2023. Speaking from the World Economic Forum’s annual meeting in Davos, Switzerland, CEO Jon Moeller told CNBC that input costs are “leveling out,” with prices rising at a “lower rate than they were previously.” Though, he cautioned that could take time to be reflected on the company’s income statement. “To the extent that all of these costs normalize, the dollar pressure subsides, that’s going to be a wonderful opportunity to invest in this business,” Moeller said. Like many U.S. multinationals, P & G has been weighed down by a strong U.S. dollar, making products more expensive abroad, and record-high inflation that sapped demand. The CEO’s comments come on the same day P & G released fiscal second-quarter earnings . The results showed organic revenue — excluding the impact of foreign exchange, acquisitions and divestitures — increased 5% year-over-year, as higher pricing made up for weaker consumer demand. At the same time, Procter & Gamble, whose high-quality consumer products include Tide, Pampers and Gillette, has been able to increase its value proposition to shoppers by broadening its portfolio to offer products at a range of price points. “Our shares are holding because we’ve transformed our portfolio to offer trade-down opportunities when consumers want them within our brands,” Moeller said. “We’re much better positioned to deal with trade down…but we’re not seeing a lot of it,” he added. Moeller also suggested demand would pick up this year as China’s economy fully reopens, while saying the state of the global economy “doesn’t look honestly horrible.” Shares of Procter & Gamble were trading down 0.6% midday Thursday, at $144.63 apiece. Bottom line Moeller offered a welcomed upbeat take on the economy and P & G’s potential for growth in 2023. P & G remains a stock we prefer amid economic uncertainty, as its consumer products are essential in any economic environment. We also like that the company has offered multiple price points for shoppers searching for more affordable options, particularly amid signs of softer demand. We hope to see profits margins expand in 2023, as input costs come down and the dollar continues to retreat. (Jim Cramer’s Charitable Trust is long PG. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
The chief executive of Club holding Procter & Gamble (PG) on Thursday said inflation appears to be easing and pressure from a strong U.S. dollar abating — comments that only reinforce our view that the consumer staples giant is a solid name to own in 2023.
Source: Business - cnbc.com
