The diaper battle could further befoul the already intense rivalry between Target and Procter & Gamble. Recently, Target began taking away prominent end-cap and shelf space from Procter & Gamble products. The move was seen as retaliation for Procter & Gamble's providing Target competitor Amazon (AMZN) with shared warehouse space during the holiday shopping season.
Last year, Pampers had $10 billion in sales for the second straight year. In 2012, Pampers became the first Procter & Gamble brand to cross the $10 billion sales mark. The business category of baby care/feminine care/family is the second highest revenue driver for the company and also contributes a significant amount to net income, and sees strong operating margins of around 21%.
Shares of Procter & Gamble were up 17% in 2013. So far in 2014, shares trade down around 3% but still offer an attractive dividend yield and growth through strong brands and product innovation. While Procter & Gamble will continue to see generic competition, don't forget about the strength of its brands and its opportunities in emerging markets.
At the time of publication, the author held no positions in any of the stocks mentioned.