Procter & Gamble's Innovation Playbook: Working or Wearing Thin?

The Procter & Gamble Company PG has long been considered a powerhouse of consumer goods innovation, with a strategy built around “irresistible superiority” across product, packaging, brand communication and retail execution. In its latest earnings call, management emphasized that this innovation engine continues to deliver results, from the success of Pampers in China to Swiffer’s record-breaking PowerMop launch and the promising debut of Tide evo, a plastic-free, water-free detergent format. These innovations illustrate the company’s ability to anticipate consumer needs, blend functionality with sustainability and leverage marketing in ways that both grow categories and reinforce brand equity.

However, the question looming over Procter & Gamble’s playbook is whether this constant push for innovation is still yielding enough incremental advantage to outpace competitors. As leadership acknowledged, some categories have lost their edge in “superiority,” leading to share pressures in North America despite heavy reinvestment in innovation. This dynamic highlights the delicate balance between breakthrough launches that fuel growth and the risk of incremental updates that fail to excite consumers or widen the competitive gap. 

The company’s restructuring program, focusing on portfolio streamlining, supply chain optimization and organizational redesign, is intended to re-energize innovation and ensure resources are deployed against the most promising opportunities.

Procter & Gamble’s ability to sustain its innovation-driven model will be tested against a backdrop of slowing category growth, trade-down pressures and heightened competition. While the company boasts a strong pipeline of upcoming launches and an unmatched track record of placing products on Circana’s New Product Pacesetters list, investors are watching closely to see if these efforts translate into market outperformance or merely defend share.

PG’s Peers: How CHD & CL Approach Innovation Differently

Church & Dwight CHD and Colgate-Palmolive Company CL showcase contrasting innovation approaches, one rooted in trusted, value-driven extensions, the other in premium, science-backed advancements.

Church & Dwight has built its reputation on value-driven innovation, leaning heavily on trusted heritage brands like Arm & Hammer, Trojan and OxiClean. Its strategy often focuses on incremental product extensions, new formats, improved formulas, or expanded uses, that resonate with consumers seeking reliable, affordable solutions. This “small but steady” approach has worked well in household and personal care, where CHD consistently finds growth opportunities in overlooked niches.

Colgate’s innovation strategy is centered on premiumization and science-backed product superiority, particularly in oral care, where brands like Colgate Total, Optic White and elmex continue to anchor growth. The company is investing heavily in new formulations, advanced whitening technologies and gum-health solutions, while also pushing into sustainable packaging and premium pet nutrition with Hill’s Science Diet and Prescription Diet innovations.

PG’s Price Performance, Valuation & Estimates

Procter & Gamble’s shares have lost around 6.9% year to date compared with the industry’s 4.5% dip.

From a valuation standpoint, PG trades at a forward price-to-earnings ratio of 22.1X compared with the industry’s average of 19.9X.

The Zacks Consensus Estimate for PG’s fiscal 2025 and 2026 EPS indicates year-over-year growth of 2.3% and 6.3%, respectively. The company’s EPS estimates for fiscal 2025 and 2026 have moved downward in the past 30 days.

Procter & Gamble currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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