P&G Cautions Coronavirus Is Causing Supply And Demand Challenges

Feb 21, 2020

At a Consumer Analyst Group presentation in Boca Raton, Fla., Thursday, Procter & Gamble CFO Jon Moeller hinted some of the Cincinnati-based company's products may be hard to find because of the coronavirus. But the extent is unclear.

Moeller says P&G is facing supply and demand challenges. "China is our second largest market. Store traffic is down considerably with many stores closed or reduced hours."

Labor is also limited, and getting the products to people is getting increasingly hard. "Some of the delivery has shifted online," he says. "There are also impacts outside of China. There's been a significant reduction in department store traffic in many Asian metro areas and the global supply."

Procter & Gamble has 387 suppliers in China that ship globally with 9,000 different materials that impact 17,600 finished products.

Moeller says each of the suppliers face their own challenges. "The operating challenges change with the hour and of course the path of the virus is unknown, making it very difficult to provide for precise estimates of impact."

The company says it continues to monitor the situation and anticipates its quarterly results will be impacted. "Results for the January to March quarter in China and for the total company will be materially impacted on both the top and bottom line by these dynamics."