This was an article Jim Cramer wrote a few days ago.
As much as the analysts who cover Procter & Gamble (PG) must hate Procter & Gamble, as much as the people who work at Procter & Gamble must hate management for missing the quarter once again, the real haters are those at the other companies in the industry who will now have to spend the rest of the day saying why their stocks shouldn't be down, but are mistakenly still taken down because of a belief that if it is terrible for P&G it is worse for them.
P&G, which used to define the notion of underpromise and overdeliver -- I first heard it from a competitor of theirs who was saying it was his job to figure out how to out-UPOD PG's UPOD -- now has no idea how to set a bar, let alone beat it.
And they keep doing it wrong. They are lowering the organic sales -- the key metric here because they always seem to be able to finesse EPS no matter what -- from 4-5% to 2-3% (and I don't have any idea how they are going to even pull that off).
PG needs to be broken up. CEO Bob MCDonald, who is totally reviled in the industry, keeps talking about incrementalism when extremism is what is needed. It will be a horrendous day for the company, which will ultimately be buoyed by the yield, which all of these packaged goods companies are.
But what matters here is that the problems bedeviling PG are largely because of the company simply falling behind in innovation.
Which brings me to my bigger point: Colgate-Palmolive (CL) will have to explain all day why it shouldn't be down.
And it shouldn't because it is crushing PG everywhere. And that, more than anything, explains the shortfall and puts it in the context you need to know.
