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P&G should be broken up - Bernstein's Dibadj

Friday, October 23, 2015 - 03:09

Sanford Bernstein's Ali Dibadj says despite the better-than-expected quarterly results, Procter & Gamble is still too slow to adapt to popular consumer trends, and might be a candidate for a break-up. Bobbi Rebell reports.

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Pitcher out effort that consumer products that Procter & Gamble meat he's starting to pay off results came in better than expected in their quarterly earnings. But they are not out of the woods just yet let's get more from Ali G but he covers the company over at Sanford Bernstein great to have you. Things happen right so like I said the numbers looked good on the surface the stock has been up that you have some reservations. Well for such as has been and expectations as well in the expectations rushing quite low so they're getting a little bit better yes but you're not quite sure how to deliver going forward. And looking at they're the organic sales which actually take out things like her which has been a problem for many multinationals those were down. Right those are down about 1% the last time they're down this much room June 2009. So really does suggest that there's some some underlying pain company's point. So what is wrong now that you see when a talented PG because like access service people are reacting very well for us yeah look I think that they're too big buckets of what's wrong. One is very analytical very understandable which is that their price caps the value gaps vs their peers actually quite hot. You know type as double the price other competitors does that make sense for the consumer to decide to buy time. In some cases it doesn't focus is dozens of the do you have a problem being too high prices in a category that's I think fixable. They're spending money to fix that men think that back improvement and let's hope that's the major problem. There's another bucket though which is which is cultural which is slow to adapt they don't have many natural organic products. Done anything that really folks is with consumer ones and that's a decision making change. They have to come through a bit more difficult tactical vote. But again. They use the new management as still as an internal persons are summaries had. Almost three decades or more of expo experience at PNG that doesn't bode well for big change to their strategy it changed their minds that. But yes it's a step in the right direction and if people. The international markets are so essential for Procter gamble two thirds of their revenue comes from outside. North America so how they've played this sentiment especially with the strong dollar and especially in China which is their number two market in her ex tells American effort out there like 8%. That's right racism 8% today for the past quarter as they reported today but I think that's a classic example and on a justice what happened in China for example from our perspective as. That consumer treated upwards they want it more quality products and property of providing quality products are competitors and so they they're a little bit behind me politics from decision making perspective. International is a big piece there doesn't have to get that right as well defined very similar problems from price cap perspective. And investors which they take stock. We do we have an app forming on the stock because we believe there's some potential. We believe that eventually one way or the other this will turn around either they get themselves fixed on business or frankly something comes via science from them. Do you think of it. Well look I think it's a very easy act case he means that this company as a whole is will be too complex. You could actually easily argue for a break up of this company all of the I'm more focused smaller competitors appeal endeared him better than PG we bargained for awhile that if you can't get through this hurdle but your own culture media to break up and and do better. It will keep watching thank you so that tonight. I think she without thinking gosh that's Sanford Bernstein about your about this is writers.

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P&G should be broken up - Bernstein's Dibadj

Friday, October 23, 2015 - 03:09