Procter & Gamble on Friday reported quarterly earnings and revenue exceeded analyst expectations as higher prices helped offset lower demand for its products, particularly in Europe.
The corporate, which owns household brands equivalent to Febreze, Charmin and Tide, also raised its forecast for organic sales growth for fiscal yr 2023 to six%, from a previous range of 4% to five%.
P&G shares over 4% in morning trading.
Here’s what the corporate reported for the quarter ended March 31 in comparison with Wall Street expectations, based on a survey of analysts by Refinitiv:
- Earnings per share: USD 1.37 vs. USD 1.32 expected
- Revenue: $20.07 billion vs. $19.32 billion expected
P&G reported net income for the fiscal third quarter of $3.4 billion, or $1.37 per share, in comparison with $3.36 billion, or $1.33 per share, a yr earlier.
net sales increased by 4% to USD 20.07 billion. Organic sales, which eliminate the impact of foreign currency, acquisitions and divestitures, grew 7% within the quarter.
But the corporate’s volume, which excludes price and currency changes, fell 3% as consumers opted for cheaper alternatives. Across its portfolio, P&G’s prices rose 10% year-on-year. The corporate once more raised prices within the US and Europe within the third fiscal quarter, chief financial officer Andre Schulten said during a press conference call.
This marks the fourth consecutive quarter of shrinking volume for the buyer giant. In a separate conference call with analysts, Schulten said he predicted the corporate’s return to volume growth would take several more quarters. He downplayed volume declines in each talks on Friday, striking an optimistic tone and saying consumption trends had stabilized globally.
Volume has improved sequentially because the company’s second fiscal quarter, Schulten said. He added that quarterly volume was down just 2% from last yr after shutting down P&G’s operations in Russia, where it had scaled back operations and promoting because the Kremlin launched a war in Ukraine last yr.
Schulten said Europe was an issue because consumers traded private label goods there. He expects the market to proceed to diminish in volume.
Nonetheless, in line with Schulten, volume actually increased in the USA, the corporate’s largest market. He pointed to a different brilliant spot in China, P&G’s second-largest market, which is finally emerging from Covid lockdowns and seeing an improvement in consumer confidence. P&G continues to be waiting for the return of Chinese travel purchases. Retail within the travel industry is a very important source of sales for SK-II, an upscale skincare brand owned by P&G.
All P&G divisions saw volume decline through the quarter, aside from Health and Beauty, where volume increased by just 1%.
P&G’s textiles and homeware segment, which incorporates brands equivalent to Tide, Swiffer and Mr. Clean, recorded a 5% decrease in volume, which is the most important decrease amongst the corporate’s business units. P&G said volume declines were mainly in Europe.
The infant, women and family care segment recorded a 4% decrease in volume. The division, which incorporates Pampers, Bounty and Charmin, also saw a decline in volume in Europe. The corporate says demand for its diapers was lower there.
P&G’s grooming division, which incorporates Gillette and Venus razors, saw a 1% decrease in volume. The unit often lags behind the remainder of P&G’s portfolio, but has done relatively higher this quarter. Nonetheless, lower demand for its equipment resulted in a decline in unit volume.