Procter & Gamble on Friday reported quarterly earnings and revenue that topped analysts’ expectations as higher prices helped offset lower demand for its products, particularly in Europe.
The corporate, which owns household brands like Febreze, Charmin and Tide, also raised its forecast for organic sales growth for fiscal 2023 to six%, up from its prior range of 4% to five%.
Shares of P&G greater than 4% in morning trading.
Here’s what the corporate reported for the quarter ended March 31 compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: $1.37 vs. $1.32 expected
- Revenue: $20.07 billion vs. $19.32 billion expected
P&G reported fiscal third-quarter net income of $3.4 billion, or $1.37 per share, up from $3.36 billion, or $1.33 per share, a 12 months earlier.
Net sales rose 4% to $20.07 billion. Organic sales, which strip out the consequences of foreign currency, acquisitions and divestitures, increased 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 were up 10% 12 months over 12 months. The corporate once more raised prices within the U.S. and Europe in the course of the fiscal third quarter, CFO Andre Schulten said during a press call.
This marks the fourth consecutive quarter of shrinking volume for the buyer giant. On a separate conference call with analysts, Schulten said he anticipates that it can take a couple of more quarters for the corporate to return to volume growth. He downplayed the amount declines during each of the calls Friday, striking an optimistic tone and saying that consumption trends have stabilized globally.
Volume improved sequentially from the corporate’s fiscal second quarter, Schulten said. He added that quarterly volume fell just 2% from last 12 months when excluding P&G’s business in Russia, where it scaled back operations and promoting because the Kremlin began the war in Ukraine last 12 months.
Schulten said Europe is a pain point, as consumers there trade right down to private-label goods. He expects that the market will proceed to pull on volume.
Nevertheless, volume actually increased within the U.S., the corporate’s biggest market, in response to Schulten. He pointed to a different brilliant spot in China, P&G’s second-largest market, which is finally recovering from Covid lockdowns and seeing improvements in consumer confidence. P&G can be still waiting for Chinese travel shopping to select up again. Travel retail is a crucial source of sales for SK-II, an upscale skincare brand owned by P&G.
All of P&G’s divisions reported declining volume for the quarter, apart from its health and wonder units, which each saw volume increase just 1%.
P&G’s fabric and residential care segment, which incorporates brands like Tide, Swiffer and Mr. Clean, saw its volume fall 5% within the steepest drop amongst the corporate’s business units. P&G said volume declines got here primarily in Europe.
The child, feminine and family care segment reported a 4% volume decline. The division, which incorporates Pampers, Bounty and Charmin, also saw volume fall in Europe. The corporate said demand for its diapers was lower there.
P&G’s grooming business, which incorporates Gillette and Venus razors, reported a 1% drop in volume. The unit has typically lagged the remaining of P&G’s portfolio, but performed relatively higher this quarter. Nevertheless, lower demand for its appliances caused the unit’s volume decline.
