P&G's New CEO Bets on Premium Diapers to Defend Prices

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Procter & Gamble's organic sales rose 4% in its first fiscal quarter of 2027, its best result in 11 quarters. Organic sales strip out currency swings, acquisitions and divestitures. Shares climbed 6% on Thursday, the biggest one-day jump since 2020, and the numbers reassured Wall Street that new CEO Shailesh Jejurikar can steer the company through a hard climate for consumer goods.

One product shows how he plans to ask shoppers for more money. Amore, P&G's first new line for newborns and toddlers since 2018, has been an early success. A 108-pack of Amore diapers costs 10% more than Pampers Swaddlers. Sales are expected to reach $100 million in the first year, and the line was a key contributor to the quarter.

Shoppers are feeling pinched, and the gap is growing between well-off consumers and those hunting for bargains. P&G's answer differs by income. At the lower end it offers lower prices and new pack sizes of household staples; average price in its baby, feminine and family care unit fell 1.2% in the quarter. At the higher end it relies on innovation that can command a premium, such as Amore and the Pantene Abundant & Strong line for women struggling with hair loss, created last year.

Jejurikar told analysts the results reflected "sharpened execution of our integrated strategy." CFO Andre Schulten, a 30-year P&G veteran, told CNBC the company knows how to grow these categories "with superior innovation, better execution, and clear communication." Bloomberg Intelligence analyst Diana Gomes wrote that the results should bolster confidence that innovation and value moves are restoring underlying growth.

A reversal of the recent trend

Under Jon Moeller, who was CEO from 2021 through 2025, P&G raised prices just enough to protect revenue without alienating consumers and pruned slower-growing products. Even so, organic sales growth slipped from 7% in fiscal 2023 to 1% in fiscal 2026.

Jejurikar joined P&G in 1989 as an assistant brand manager in India. He reached the global leadership team in 2014, ran the Fabric & Homecare unit from 2019 and became operating chief two years later. He took over as CEO on Jan. 1 and was named chairman this summer. The two-year restructuring program begun under Moeller, which included 7,000 job cuts, is halfway done.

His mandate goes beyond finishing it. He is expected to revive P&G's innovation machine so the company protects market share and pricing power with a steady flow of new products. Whether shoppers counting every dollar keep paying for cashmere-soft diapers once the novelty fades, and whether inflation keeps biting, remains the open question.

Source: Fortune