On that consistency front, after a decade of underperformance, missed expectations and CEO churn starting in 2008, P&G has become almost boringly predictable in delivering strong results the past three years under Taylor, 63, who took charge in 2016.
As has been the recent trend, P&G exceeded Wall Street expectations last quarter, with organic sales up 4% despite comparison to a year-ago quarter heavily driven by pandemic-related sales surges of paper and cleaning products. U.S. sales did fall 1% vs. a 19% sales spike a year ago, primarily because of comparisons to retailers last year restocking toilet paper and paper towel shelves left bare by panic buying.
In a media call earlier today, Taylor said P&G will continue to spend aggressively in the new fiscal year despite inflationary cost pressures on margins.
“Our ad spending was up this year, and we’ll continue to invest behind winning brands,” Taylor said.
On Moeller’s lack of the classic marketing experience P&G CEOs have had since future CEO Neil McElroy coined the term “brand manager” in a 1931 memo, Taylor said Moeller has “a tremendous background."
“Yes, he has come from a deep financial background, but he’s been the chief operating officer for the last several years, and even before that as the chief financial officer, Jon worked closely with me and the leadership team and all the categories,” Taylor said. “He understands and strongly supported the increased investment that we have in media and innovation. So I would consider him a very well-rounded executive.”
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Taylor noted that he himself spent 11 years in manufacturing before he moved into brand management with what was then an obligatory short stint on the way up the general management ladder.
For his part, while Moeller didn’t speak much on the earnings call and wasn’t on the media call, he endorsed continuing Taylor’s focus.
“How we gain share is very important,” Moeller said. “David has talked many times in our discussion, as has Andre, about our intent to be a disproportionate driver of market growth …The notion that we’re taking business from competitors and it’s only a matter of time [before they take it back], that’s not how we look at it. Our job is to be constantly expanding this pie, constantly expanding the number of households we serve.”
Taylor also noted that under the current P&G structure Moeller helped develop, six business unit CEOs are responsible for leading overall strategy and setting their own marketing and innovation budgets.
One of those CEOs, Shailesh Jerjurikar, 52, who now heads P&G’s Fabric and Home Care business, will become chief operating officer directly under Moeller when duties officially change Nov. 1. It’s the first time P&G has named a chief operating officer at the outset of a new CEO’s term, appearing to signal a line of succession well into the future. As has been customary in most P&G CEO transitions of recent decades, Taylor will remain on as executive chairman to begin Moeller’s tenure.
