P&G CEO expects higher demand for cleaning products to outlast pandemic
People are no longer stocking up on household supplies like they did in the early days of the coronavirus pandemic, but Procter & Gamble Chairman and CEO David Taylor told CNBC on Tuesday that the company expects elevated demand for certain categories to remain.
"They're not hoarding anymore. In many cases, they're working off the inventory they've built at home," Taylor said in an interview that aired on "Closing Bell." "But I think consumers recognize there's still a lot of variability ahead in what could happen so they're going to maintain a little more than they did pre-pandemic."
Specifically, Taylor said P&G — owner of brands such as Mr. Clean, Microban 24 and Crest — anticipates people will maintain a greater focus on cleaning and hygiene, offering a possible tailwind for the consumer-goods giant.
"I think we've all gotten in habits of cleaning. We've got in the habit of the home being a bigger part of our life," said Taylor, who has led Cincinnati-based P&G since 2015. "In many ways, these habits will likely sustain for ... an extended period of time post-pandemic, and that bodes well for many of the categories we compete in."
P&G was viewed as the kind of company that stood to benefit from the pandemic, with CNBC's Jim Cramer including its stock in his Covid index, for example. But investors have wondered about the durability of any Covid-related sales boosts, particularly as a wider range of economic activity resumes and more immediate virus concerns fade.
Shares of P&G are down more than 10% since notching a 52-week high of $146.92 on Nov. 9. For comparison, the benchmark S&P 500 is up a little over 9% in that same time frame.
Taylor said it will be "interesting" to see how consumer spending is recalibrated but that he feels "health, cleaning and hygiene is going to remain strong post-pandemic."
Taylor is not alone in his prediction that altered attitudes toward cleanliness will stick around. Linda Rendle, the chief executive of Clorox, offered a similar outlook in a CNBC interview Friday. "People are adopting cleaning as more of a thing around safety and wellness, not just a chore," Rendle said.
Clorox raised its full-year sales outlook following its quarterly earnings report earlier this month, projecting revenue growth of between 10% and 13% in fiscal 2021. P&G did the same in January, when it posted results for its fiscal second quarter. It said it now expects full-year sales to grow between 5% and 6%, up from its previous forecast of 3% to 4%.
P&G shares closed Tuesday's session higher by 0.74% to $127.52 apiece.