P&G's Analyst Conference Reiterates Growth Struggles Amid Restructuring and Competitive Pressures

What happened

Procter & Gamble presented at the Consumer Analyst Group of New York Conference, highlighting its persistent challenges with slowing organic growth and flat volumes in core categories. Recent quarters, including December 2025, showed negative volumes and margin compression, driven by private-label competition and tariff headwinds. Management emphasized the ongoing restructuring plan, involving up to 7,000 job cuts, to improve cost structure and offset these pressures. However, the presentation lacked concrete new initiatives to re-accelerate growth, instead focusing on maintaining dividends and cash returns despite falling free cash flow productivity. Overall, the update reinforces P&G's defensive but lagging position in the consumer staples sector.

Implication

P&G's conference presentation underscores that organic growth remains below historical targets, with volumes stagnant or declining, particularly in key segments like Baby, Feminine & Family Care. The restructuring efforts, while necessary, may not fully offset tariff costs and competitive pressures, risking further margin erosion. High payout ratios, with dividends and buybacks sometimes exceeding adjusted free cash flow, raise sustainability concerns if earnings growth stagnates. Market sentiment has shifted to view P&G as a defensive laggard, capping multiple expansion and limiting upside to the base-case $155 valuation. Therefore, investors should await either a lower entry price near $132 or two consecutive quarters of ≥3% organic growth with positive volumes before increasing exposure.

Thesis delta

The conference presentation does not alter the existing thesis; it confirms the DeepValue report's 'WAIT' rating by reiterating P&G's growth challenges and reliance on restructuring. Investors should continue monitoring quarterly results for signs of volume stabilization and free cash flow improvement before reconsidering the call.