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Good Pricing Trends for a Consumer Products Play

This holding is the industry leader, and I love the turnaround story.
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With all the fanfare about pricing and sales competition in the household products/cosmetics industry, I thought I'd give an update on the four-week trends according to the latest Nielsen data. I don't normally make judgments based on one four-week period, but since there is heightened interest it's worth pointing out that the trends on pricing declines remain benign and sales not surprisingly remain sluggish (as witnessed from all the companies in the most recent quarter).

Overall, Procter & Gamble (PG) fared the best, with sales and volumes flat and improved prices in 14 out of its 20 categories. Its three largest products were mixed: Laundry share rose 60 basis points (bps) with sales down (although less vs. last month, at -3.5% vs. -5.4% in the prior month); Paper Towel share gained 70 bps, with sales up 1.6%; and Toilet Tissue was down 20 bps, with sales down 3% (in line with prior month and stronger than its branded peers). Interestingly, P&G's value products and share increased in three of its top five categories from the year- ago level. Average prices were still down in 13 of 20 categories but again improved from the prior month in 14 of the 20 categories (they either were less negative or more positive).

Its competitors continue to struggle: Colgate (CL) lost share in 4 of 5 categories, on a 4% sales decline and a 3.6% decline in volumes; Clorox (CLX) share was slightly higher but sales fell 3.8% and volumes fell 2.4%; Church & Dwight (CHD) steadied its market share but sales fell 2.5% and volumes fell 3.8%; and Energizer (ENR) posted a 6% decline in its battery division (a positive for P&G's Duracell) with a 0.3% decline in sales and a 1.7% volume increase.

The category remains competitive and consumers continue to be selective in what they are buying -- this isn't a surprise. I continue to like P&G as the industry leader and the price "setter," and I love the turnaround story, with 20% more products coming out by the end of the year, which will better position the company in the value segments and emerging markets. And the most recent data from the industry suggests things are slightly better for P&G than the rest of the group.

Regards,

Jim Cramer

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DISCLOSURE: At the time of publication, Cramer was long PG.