A Procter & Gamble (P&G) logo is seen throughout the sixth China International Import Expo (CIIE) on the National Exhibition and Convention Center (Shanghai) on November 7, 2023 in Shanghai, China.
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Procter & Gamble on Tuesday reported mixed quarterly earnings and revenue for its fiscal second quarter of 2024 as price hikes helped boost revenue 3%.
The corporate also narrowed its outlook for full-year adjusted earnings per share to a spread of $6.37 to $6.43, although its forecast for unadjusted earnings fell attributable to its plans to put in writing down Gillette and restructure certain markets.
Shares of the corporate were up greater than 4% in morning trading.
Here’s what P&G reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG, formerly often called Refinitiv:
- Earnings per share: $1.84 adjusted vs. $1.70 expected
- Revenue: $21.44 billion vs. $21.48 billion expected
P&G reported fiscal second-quarter net income attributable to the corporate of $3.47 billion, or $1.40 per share, down from $3.93 billion, or $1.59 per share, a 12 months earlier.
The Tide detergent owner wrote down the worth of razor brand Gillette by $1.3 billion, following through on an announcement it made in December. The corporate previously said it will record as much as $2.5 billion in charges over the subsequent two fiscal years related to Gillette impairment charges and restructuring its business in some markets, like Argentina and Nigeria.
Excluding the impacts of restructuring and intangible impairment, the corporate earned $1.84 per share, and topped analysts projections.
Net sales rose 3% to $21.44 billion, shy of what Wall Street had anticipated. P&G’s organic revenue, which strips out the impact of acquisitions, divestitures and foreign exchange, climbed 4% within the quarter.Â
Product volumes
After roughly two years of upper prices on their Charmin toilet paper and Downy fabric softener, consumers have pulled back on their purchases of P&G products. The corporate’s volume was flat overall for the quarter, and only its grooming business reported volume growth. The metric excludes the impact of currency and pricing changes to reflect demand.
Demand has improved in North America and Western Europe, executives said on the corporate’s conference call. Nonetheless, other markets saw weaker demand. For instance, Greater China saw its organic sales shrink 15%. Executives cited further declines in consumer confidence as one reason for the decline in its second-largest market.
P&G also noted that the Middle East saw weaker demand, although CEO Jon Moeller said the corporate hopes that recent tensions there, flared by the Israel-Hamas war, will ease.
The grooming division, which incorporates Gillette, saw volume grow 1% within the quarter.
P&G’s beauty segment reported flat volume for the quarter as sales of its pricey SK-II skin-care brand continued to struggle, particularly in China. Its fabric and home-care business also reported flat volume.
The corporate’s health-care division reported volume declines of three%. P&G said the marketplace for respiratory products, like its brand Vicks, shrank throughout the quarter due to a delayed begin to the cold and flu season. However the division will likely get a lift next quarter as more consumers find themselves coughing and sneezing. Moeller said even he had a “frog in [his] voice.”
P&G’s feminine, baby and family care business saw its volume fall 2% within the quarter, fueled by shrinking demand for its diapers and tampons. Of that division, only its family care segment, which incorporates Bounty paper towels, saw volume increase.
For fiscal 2024, the corporate now anticipates core earnings per share growth of 8% to 9%, narrowing its prior range of 6% to 9%. Nonetheless, it now expects unadjusted earnings per share to be flat to down 1%, significantly lower than a previous range of 6% to 9% growth.
P&G reiterated its forecast for fiscal 2024 sales growth of two% to 4%.
