• by Erik Oster , October 20, 2023

CPG monolith P&G is spending big on marketing, and sees that strategy paying off.

The company increased its marketing spend by 2.6% for the first quarter of the 2024 fiscal year, and sees “strong incentive for us to continue that level of investment,” especially “if we continue to see strong response to the marketing spend,” on innovation efforts, according to CFO Andre Schulten, speaking on an earnings call. "That's part of the business model."

The company outpaced analyst expectations in its earning report for the first quarter of the 2024 fiscal year, reporting 6% sales growth and 7% organic sales growth compared to the year prior

Some of the strongest sales growth came from the grooming and fabric & home care categories, with P&G reporting organic sales growth of 9% year-over-year in each category. P&G’s grooming brands include Gillette, Head & Shoulders, and Pantene. Its fabric & home care brands include Ambi Pur, Downy, Febreze, and detergent category leader Tide.

While acknowledging that consumers were feeling "more of a pinch" heading into the holiday season amid inflationary forces and cost of living increases, Schulten said on the call that he felt confident P&G would continue to "effectively compete even as consumers look at the private label versus branded value creation," and that as consumers weigh their options, "the balance seems to be still in our favor," adding, "you can see our ability to grow in markets even when we see private label shares expand."

In a statement accompany P&G's earnings report, Jon Moeller, chairman of the board, president and CEO, explained that the company remained committed to a strategy of driving brand preference through performance across categories and "superiority" across areas including "product performance, packaging, brand communication, retail execution and consumer and customer value."

Schulten echoed such sentiments on the earnings call, saying, "The main intervention for us continues to be investing in innovation and continuing to invest in media support to communicate the strength and the value that our brands can provide."