The Procter & Gamble Company (PG) recently announced reorganization of its business in order to support long-term growth. The company intends to group its Global Business Units into four industry-based sectors and place each sector under a Group President who would in turn report to A.G. Lafley, P&G Board Chairman, President and Chief Executive Officer. These changes will be effective from Jul 1, 2013.
Previously, the company had five reportable segments namely Beauty, Grooming, Health Care, Fabric Care and Home Care, and Baby Care and Family Care. From Jul 1, 2013, the four sectors will be as follows:
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Global Baby, Feminine and Family Care led by Martin Riant
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Global Beauty led by Deborah A. Henretta
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Global Health and Grooming led by David S. Taylor
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Global Fabric and Home Care led by Giovanni Ciserani
The changes are expected to encourage global expansion and product innovation, improve productivity, strengthen the business in developed markets and maintain growth in developing markets.
Fiscal 2012 (ending Jun 2012) was a tough year for P&G as it performed below expectations. Recently, the company posted mixed third-quarter 2013 results in late April. Though earnings exceeded management’s expectations on cost savings, organic revenue growth was quite weak. Its fourth-quarter outlook was also quite subdued with earnings expected to decline from the year-ago results. The reorganization is expected to revive the consumer giant’s struggling business.
P&G carries a Zacks Rank #3 (Hold).
Other consumer staples stocks that are worth considering include Flower Foods, Inc. (FLO), carrying a Zacks Rank #1 (Strong Buy) and Campbell Soup Company (CPB) and H. J. Heinz Company (HNZ), both carrying a Zacks Rank #2 (Buy).
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