Shares in consumer goods giant Procter & Gamble (PG) had an accident today after a revelation that it is selling Chinese diapers despite the threat of tariffs.
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PG, known for selling products in the U.S. that have been manufactured domestically, said it was selling luxury aloe-infused “bumbum” brand diapers made in China at retailer Target (TGT). The move comes as its top-selling Pampers and Luvs brands lose share to a growing number of low-cost imported rivals.
As can be seen above, the company’s baby, feminine and family care revenues have seen huge volatility in recent years.
PG shares dropped 1.5% in early trading.
Luxury Move
According to a report in Reuters, Target said earlier this year it would offer bumbum as part of an overhaul of its baby and toddler products, but did not identify the brand’s manufacturer. P&G said in a statement that it has introduced bumbum as part of its broader strategy to offer superior products, and that the diaper complements its Pampers and Luvs brands.
The move also raises questions on how exposed P&G is now to Trump’s tariffs on products imported from China and other countries in the Far East facing huge levies.
It also flies in the face of President Trump’s aim to boost U.S. domestic manufacturing and jobs. This ambition and the impact of tariffs have led a number of companies to up their U.S. manufacturing efforts from brewer AB Inbev (BUD) to auto maker Honda (HMC), tech titan Apple (AAPL) and pharmaceutical giant AstraZeneca (AZN).
Is PG a Good Stock to Buy Now?
On TipRanks, PG has a Moderate Buy consensus based on 8 Buy and 5 Hold ratings. Its highest price target is $181. PG stock’s consensus price target is $171.25, implying a 9.58% upside.
