Procter & Gamble (PG) posted better-than-expected second quarter revenues Thursday, while repeating its near-term profit forecasts, but hinted that higher prices will likely boost full-year sales.
Procter & Gamble said core earnings for the three months ending in December, the group's fiscal second quarter, were pegged at $1.59 per share, a 4.2% decrease from the same period last year but essentially matching of the Street consensus forecast.
Group net sales, Procter & Gamble said, nudged 0.7% lower to $20.8 billion, just ahead of analysts' estimates of a $20.73 billion tally. Organic sales were up 5%.
Looking into the group's 2023 fiscal year, P&G reiterated its forecast for core earnings growth of between flat and 4%, with organic sales growing between 4% to 5%.
All-in sales, however, will be up between 1% and 3%, compared to its prior forecast of a decline of between 1% and 3%, as it continues to pass on price hikes for its key brands, which include Tide detergent, Head & Shoulders shampoo and Pampers diapers. Prices were up 9% across the board over the September quarter, while sales volumes fell 3%, and noted further mark-ups were planned for the three months ending in December.
“We delivered solid results in the second quarter of fiscal year 2023 in what continues to be a very difficult cost and operating environment,” said CEO Jon Moeller. “Progress against our plan fiscal year to date enables us to raise our sales growth outlook for fiscal 2023 and maintain our guidance range for EPS growth despite significant headwinds"
"We remain committed to our integrated strategies of a focused product portfolio, superiority, productivity, constructive disruption and an agile and accountable organization structure," he added. "These strategies have enabled us to build and sustain strong momentum. They remain the right strategies to navigate through the near-term challenges we’re facing and continue to deliver balanced growth and value creation.”
Procter & Gamble shares were marked 1% lower in early Wednesday trading following the earnings release to indicate an opening bell price of $144.04 each, a move that would nudge the stock into negative territory for the past six months.
Fabric and home care sales, which include cleaning products such as Tide laundry detergent, Joy, Febreze and Cascade, rose 8% from last year on an organic basis -- which strips out currency market impacts -- while baby, feminine and family care segment sales were 4% higher from 2021 levels.
Beauty sales rose 3% from last year, the company said, while personal grooming sales, which includes skin care products, were largely flat to last year's levels.
