Procter & Gamble reported mixed quarterly results on Friday as the corporate struggles to draw buyers again after two years of price hikes across its portfolio, from Tide laundry detergent to Charmin toilet paper.
The company’s prices rose 3% in comparison with the identical period last yr, although CFO Andre Schulten said in a media call that P&G didn’t make any price increases nationwide in the course of the quarter.
Despite the disappointing sales, the buyer giant raised its full-year profit growth forecast.
The company’s shares fell greater than 1% in morning trading.
Here’s what P&G reported in comparison with Wall Street’s expectations, based on an LSEG analyst survey:
- Earnings per share: $1.52 vs. expected $1.41
- Revenue: $20.2 billion vs. expected $20.41 billion
P&G reported third-quarter net income of $3.75 billion, or $1.52 per share, up from $3.4 billion, or $1.37 per share, a yr earlier.
Net sales rose 1% to $20.2 billion. Organic revenue, which excludes acquisitions, divestitures and foreign currency, increased 3% within the quarter.
But the corporate’s quarterly volume remained flat for the second quarter in a row. In October, executives said they expect volume growth to return in fiscal 2024. After three quarters, the corporate has not lured back lots of the shoppers it has scared away with its price increases over the past two years.
However, three of P&G’s divisions reported volume growth for the quarter. Its beauty segment, which incorporates Olay and Pantene, saw volumes increase 1%, driven by innovations in personal care. The company’s cosmetics division, which incorporates Gillette and Venus razors, posted volume growth of two%. And fabric and residential care products, which include Febreze and Swiffer, posted volume growth of 1%.
But volume continued to say no in P&G’s health and baby, feminine and family care divisions. The company blamed the declines on higher prices and a weaker cold and flu season.
Geographical location also played a job in the corporate’s weak sales. China, the corporate’s second-largest market, continues to be seeing weaker demand for products akin to pricey SK-II skincare. Schulten also said retailers in some markets, particularly within the Middle East, had scaled back promotions resulting from geopolitical tensions surrounding the war in Gaza.
“The impact is visible but limited, and we expect it to hopefully diminish as these tensions ease over time,” he said.
In the United States, P&G’s largest market, the corporate’s volume grew 3%. Schulten said the U.S. consumer is neither giving in nor changing their purchasing behavior.
“Consumers don’t want to take risks when it comes to the type of service … they ultimately know the price of a discount,” he said.
For the total yr, P&G now expects core net earnings per share to grow 10% to 11%, in comparison with the previous range of 8% to 9%. The company also raised its forecast for unadjusted profit growth to a variety of 1% to 2%, after its previous forecast fell to zero from a 1% decline. P&G maintained its forecast for sales growth of two% to 4% in 2024.
P&G also now expects a profit of $900 million from favorable raw material costs, up from its previous forecast of $800 million. This is a reversal from the last two financial years, when raw material costs weighed on the corporate and led to cost increases.
Correction: P&G’s net sales rose 1% to $20.2 billion. A previous version misstated a number.
