By Melodie Warner
TAKING THE PULSE: All the big consumer-products companies are
struggling to defend their market share as more shoppers trade down
from more expensive, name-brand labels to the cheaper private-label
alternatives offered by grocery stores. The battle plans include
rolling out more discounts and coupons, and increasing advertising
budgets.
Competitors' lower prices have cut into Procter & Gamble
Co.'s (PG) business, prompting the world's largest
consumer-products company to lower its earnings guidance for the
fiscal fourth quarter and fiscal 2013. Investors will be looking to
see how the other consumer-products deal with softness in developed
markets and the negative impact from foreign exchange rates.
P&G may be more sensitive to the global economic slowdown than
its competitors because its products are pricier.
COMPANIES TO WATCH:
Coca-Cola Co. (KO) - reports July 17
Wall Street Expectations: Analysts polled by Thomson Reuters
recently expected a profit of $1.19 a share on $13 billion in
revenue, compared with $1.17 a share and $12.74 billion,
respectively, a year earlier.
Key Issues: The company's namesake soda and Diet Coke have been
the first and second-best-selling beverage in the U.S. over the
past year. But results have been challenged as Americans continue
to reduce their soft-drink consumption. The company has plans to
plow annual cost savings back into the marketing of its brands, and
Coke announced last month that it and its bottling partners will
invest $5 billion in India by 2020. Despite the slowdown close to
home, Coke has continued to grow worldwide sales and volume with
the help of gains in India, as well as developed markets like
Germany, Japan and Spain.
PepsiCo Inc. (PEP) - reports July 25
Wall Street Expectations: Analysts forecast a profit of $1.10 a
share on $16.74 billion in revenue, compared with $1.21 a share and
$16.83 billion, respectively, a year earlier.
Key Issues: The food and beverage company has said it won't turn
to discounts in order to sell more soda. Pepsi has fallen further
behind rival Coca-Cola in recent years, and it hopes a beefed-up
marketing campaign can help turn around its business. The company
also plans to lean on new products--like its mid-calorie soda Pepsi
Next--to try to grow its U.S. market share. Meanwhile, its snacks
continue to perform well. Worldwide snack revenue grew 7% in the
first quarter, but beverage sales expanded just 2%.
Procter & Gamble Co. (PG) - reports Aug. 3
Wall Street Expectations: Analysts forecast a profit of 77 cents
a share on $20.25 billion in revenue, compared with 84 cents a
share and $20.86 billion, respectively, a year earlier.
Key Issues: The consumer-products giant warned that sales and
profits will be lower than expected last month, as it continues to
lose market share and struggles to manage pricing and rising
commodity costs. P&G said its fiscal fourth-quarter sales
likely fell by 1% to 2% from a year earlier, compared with its
previous forecast of 1% to 2% growth. The company also forecast
core earnings between 75 cents and 79 cents a share, down from a
previously expected range of 79 cents to 85 cents.
Kraft Foods Inc. (KFT) - date to be announced
Wall Street Expectations: Analysts forecast a profit of 66 cents
a share on $14.07 billion in revenue, compared with 62 cents a
share and $13.9 billion, respectively, a year earlier.
Key Issues: The food company has said it will use ongoing cost
savings to invest in marketing and the rollout of new products,
rather than discounting. Kraft has been able to raise prices with
greater success than most packaged-food companies, helping it to
turn in better profits despite rising commodity costs. But the
higher prices have contributed to Kraft losing market share in some
of its North America and developing markets categories. Yet it held
or gained share in nearly two-thirds of categories in Europe during
the first quarter.
(The Thomson Reuters financial estimates and year-earlier
figures may not be comparable due to one-time items and other
adjustments.)
Write to Melodie Warner at melodie.warner@dowjones.com