Investors in Jim Cramer’s Charitable Trust are purchasing 30 shares of Procter & Gamble at roughly $156.41, increasing their ownership to 520 shares and a weighting of 2.52%. Shares of Procter & Gamble had dropped over 2% following downbeat comments from Ulta regarding the beauty market at a recent conference. Ulta warned of a slowdown in the beauty category due to various economic and societal factors, as well as increased competition from Sephora. This news caused Ulta’s shares to plummet over 14%, leading to selling pressure on other companies in the industry including Procter & Gamble.
Despite the challenges faced by the beauty segment, Procter & Gamble’s shares surged after earnings due to improving volume trends and profit margins. The company’s Beauty segment is expected to contribute significantly to its pre-tax income in fiscal year 2024, historically being a source of growth. While organic sales only increased by 1% last quarter, attributed to a temporary boycott of a Japanese skincare brand owned by P & G, the overall outlook remains positive. The recent downturn in Procter & Gamble’s stock price due to Ulta’s woes presents an opportunity for investors to upgrade their rating on the stock and purchase more shares.
Estee Lauder, another company in the beauty industry, is also feeling the impact of the negative news from Ulta. However, its story is different as it is heavily tied to China and Asia’s Travel Retail market, which is undergoing inventory de-stocking. Despite the challenges, there is belief that an inflection point in Estee Lauder’s business may be approaching, as indicated by the company’s CEO and analysts from Citi and Bank of America. While investors are hesitant to sell their position in Estee Lauder, they are cautious in their approach.
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