P&G Investors Need A NyQuil

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What's going on?

American consumer goods giant Procter & Gamble (P&G) which deals in everyday household items like Gillette razors, Pampers diapers and Tide laundry detergent reported results on Tuesday with a loud thud.

What does this mean?

P&G managed to beat expectations on profit, but miss them on sales. After accounting for restructuring and tax costs, the firms earnings were 11% higher than this quarter last year, but its sales were roughly $40 million shy of what was predicted. P&G shares have fallen 13% since the beginning of the year and this set of results doesnt look like much help.

Why should I care?

For you, personally: Times are a-changin.

One of P&Gs weak spots has been its shaving business, where its facing ongoing competition from Dollar Shave Club an online, subscription-based company that delivers personal grooming products to your front door. P&Gs baby business has also suffered, in part from retailers laying on discounts (likely in an attempt to compete with ecommerce adversaries like Amazon). The internet continues to disrupt business giving you, the consumer, ever-greater power (if not cheaper prices, too) and ageing corporations (P&Gs a doddery 181 years old) a run for their money.

The bigger picture: Pills are all the rage.

P&G agreed to acquire pharmaceutical giant Mercks consumer health business earlier this year, expanding its healthcare offerings (which currently include Vicks and Pepto-Bismol). Meanwhile, another pharmaceutical powerhouse Pfizer reported second-quarter earnings that gobbled up expectations. The maker of Viagra is upping its spending on research and development to speed up the release of blockbuster drugs (drugs that generate sales of $1 billion or more per year) and thinking about what to do with its own consumer health business

Originally posted as part of the Finimize daily email.

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