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Closer look at consumer staples: KO, KMB, PG

Yahoo Finance's Alexis Christoforous, Brian Sozzi and Ines Ferre discuss this week's quarterly earnings results from consumer staples, Coca-Cola, Kimberly-Clark and Procter & Gamble.

Video Transcript

BRIAN SOZZI: With earnings out this week from Coca-Cola, Kimberly-Clark, and Procter & Gamble, we are getting a fresh picture on how COVID-19 is still shaping the lives of consumers. Let's do a-- do a little sector analysis here, group. Ines, so Coca-Cola, they came out, their earnings beat. But the volume in October still under pressure, and you get the sense the fact that people are not drinking beverages inside a restaurant, sports are still under wraps, continues to pressure this company.

INES FERRE: That's right. So drink sales for Coca-Cola for restaurants, theaters, offices, all of those have continued to be under pressure, but the company did note some home consumption has increased. But Coke also recently announced that it is going to be slimming down its portfolio, so that kind of gives you an idea of a focus of focusing on the drinks that are the most popular, the ones that people drink the most, phasing out about half of its products like ZICO Coconut, which has underperformed for the company, and also Tab. Everybody remembers Tab. That's one of the drinks that has been very popular.

But if you just take a look also at some other consumer staple companies, also Kimberly-Clark reported its quarterly results-- a mixed quarter with manufacturing costs that have been up, advertising spending also up. And also the company in its professional segment saw a decline of 16%, and that isn't too surprising since offices, many offices, have remained closed. Its consumer tissue segment was the one that really outperformed. Its personal care segment also higher, but that professional segment that has come under pressure. I just want to note though, Brian, if we just take a look at consumer staples overall this year in the sector watch, if we're looking at year to date, you can see that consumer staples is up 3.2%, underperforming the S&P 500, Brian.

BRIAN SOZZI: Nobody is drinking Tab anymore, Ines. Stop it. Just stop it. [LAUGHTER] Alexis--

INES FERRE: You know, a lot of people were commenting online. There were some Tab lovers out there.

BRIAN SOZZI: Yeah, that's fake news. Alexis, but, you know, we did talk to P&G CFO Jon Moeller early in the week. Really two different stories-- Coca-Cola struggling, yet P&G doing very well. Kimberly-Clark, good sales, but the profits just not up to snuff.

ALEXIS CHRISTOFOROUS: Yeah, for sure. And you know Kimberly-Clark by the way said that their restructuring is expected to be complete in 2021. Total charges as high as between $1.7 and $1.9 billion. But you know what? Both Kimberly-Clark and P&G were able to raise their sales and profit outlook, which is definitely encouraging as we all continue to run out and buy those paper goods during this pandemic.

BRIAN SOZZI: And also--yeah.

INES FERRE: And one note on Kimberly-Clark too-- excuse me, on P&G as you guys had interviewed the CFO, Jon Moeller recently-- that those trends seen during COVID-19 are expected to continue even afterwards-- people taking better care of themselves, people cleaning more, so for P&G it was a very good quarter, and in fact this stock had hit recent highs not too long ago.

BRIAN SOZZI: Still contend no one is drinking Tab. We'll leave it there. We'll take it off--

[INTERPOSING VOICES]

ALEXIS CHRISTOFOROUS: I can't remember the last time I had Tab. I really can't.

BRIAN SOZZI: And that's why they're getting rid of it. And that's why they're getting rid of it.

ALEXIS CHRISTOFOROUS: Exactly. And that aftertaste-- I can't do. But anyway--

BRIAN SOZZI: Nope, can't do it.