Procter on Friday Report Quarterly earnings and revenue topped analysts’ expectations as higher prices helped offset lower demand for its products, especially in Europe.
The company, which owns household names such as Febreze, Charmin and Tide, also raised its forecast for organic sales growth in fiscal 2023 to 6% from a previous forecast of 4% to 5%.
Procter & Gamble shares were up more than 4% in early trading.
Here’s how the company’s quarterly report ended March 31 compared with Wall Street expectations, according to a Refinitiv survey of analysts:
- Earnings per share: $1.37 vs. $1.32 expected
- Revenue: $20.07 billion vs. $19.32 billion expected
P&G reported third-quarter net income of $3.4 billion, or $1.37 a share, up from $3.36 billion, or $1.33 a share, a year earlier.
net sales It rose 4 percent to $20.07 billion. Organic sales, which exclude the impact of foreign exchange, acquisitions and divestitures, increased 7 percent in the quarter.
But the company’s volume, excluding price and currency changes, fell 3% as consumers opted for cheaper alternatives. Within its portfolio, Procter & Gamble is up 10% year-over-year. The company raised prices again in the U.S. and Europe during the fiscal third quarter, Chief Financial Officer Andre Schulten said at a news conference.
It marked the fourth straight quarter of declining sales for the consumer giant.. On a separate conference call with analysts, Schulten said he expected the company to take a few more quarters to return to volume growth. In two conference calls on Friday, he downplayed the decline in trading volumes, sounding upbeat and saying global consumption trends had stabilized.
Schulten said the company’s second-quarter sales improved sequentially. Quarterly sales were down just 2 percent from last year when excluding Procter & Gamble’s business in Russia, where it has scaled back operations and advertising since the Kremlin started the war in Ukraine last year, he added.
Schulten said Europe is a pain point because consumers there buy private-label goods. He expects the market to continue to weigh on volume.
However, sales in the U.S., the company’s largest market, actually increased, according to Schulten. He pointed to another bright spot in China, P&G’s second-biggest market, where it is finally recovering from the Covid lockdown and consumer confidence has improved. Procter & Gamble is also waiting for China’s tourism shopping to pick up again. Travel retail is an important source of sales for Procter & Gamble’s high-end skin care brand SK-II.
All of P&G’s divisions reported lower volumes for the quarter, with the exception of health and beauty, which saw sales rise just 1%.
Procter & Gamble’s fabric and home care unit, which includes brands such as Tide, Swiffer and Mr. Clean, saw sales fall 5%, the biggest drop among the company’s business units. Procter & Gamble said that the decline in sales mainly came from Europe.
Sales in the baby, feminine and home care segment fell 4%. The unit, which includes Pampers, Bounty and Charmin, also saw sales decline in Europe. The company said demand for its diapers was lower there.
Sales in P&G’s beauty business, which includes Gillette and Venus razors, fell 1%. The unit typically lags the rest of P&G’s portfolio, but performed relatively well this quarter. However, lower demand for its home appliances led to lower sales in the segment.