P&G Q2 Results Top Estimates; Backs FY23 Earnings View, Lifts Sales Forecast

Consumer goods giant Procter & Gamble Co. reported Friday higher earnings and net sales in its third quarter, both above the Street estimates, benefited by higher pricing in all segments, despite weak volumes. Further, the company maintained fiscal 2023 earnings growth view, and raised sales forecast.

In pre-market activity on the NYSE, P&G shares were gaining around 2.1 percent to trade at $154.

Jon Moeller, Chairman of the Board, President and Chief Executive Officer, said, “We delivered strong results in the third quarter of fiscal year 2023 in what continues to be a very difficult cost and operating environment. Our team’s strong execution of our strategies and our progress through three quarters enable us to raise our fiscal year outlook for sales growth and cash return to shareowners and maintain our guidance range for EPS growth despite continued cost and foreign exchange headwinds.”

For fiscal 2023, P&G continues to expect net earnings per share growth in the range of in-line to up four percent from last year’s earnings of $5.81. The company added that it expects earnings per share results towards the lower end of the guidance range.

Further, the company raised its guidance for all-in sales to grow around one percent from last year from a prior guidance range of down one percent to in-line. The company also raised its outlook for organic sales growth to approximately six percent from a prior growth range of four to five percent.

For the third quarter, the company’s earnings totaled $3.40 billion, up 1 percent from $3.36 billion last year. Earnings per share were $1.37, an increase of 3 percent from last year’s $1.33.

On average, 18 analysts polled by Thomson Reuters expected the company to earn $1.32 per share for the quarter. Analysts’ estimates typically exclude special items.

Operating margin increased 40 basis points on a reported basis, and 160 basis points on a currency-neutral basis.

Gross margin increased 150 basis points on a reported basis, and the growth was 220 basis points on a currency-neutral basis.

The company’s net sales rose 3.6 percent to $20.07 billion from $19.38 billion last year. The Street was looking for sales of $19.29 billion for the quarter.

Organic sales increased 7 percent driven by a 10 percent increase from higher pricing and 1 percent increase from favorable product mix, partially offset by 3 percent decrease in shipment volumes.

On a segment basis, Beauty sales grew 3 percent on a reported basis and 7 percent organically. Skin and Personal Care organic sales grew low single digits and Hair Care organic sales increased double digits driven by increased pricing.

Grooming sales grew 1 percent, while organic sales growth was 7 percent. All regions grew organic sales.

In Health Care segment, reported sales went up 6 percent and organic sales increased 9 percent versus year ago. Oral Care organic sales increased high single digits, and personal Health Care organic sales increased double digits.

Fabric & Home Care sales growth was 5 percent on a reported basis and 9 percent organically with good growth in Fabric Care and Home Care sales.

Baby, Feminine & Family Care sales grew 3 percent, while organic growth was 6 percent. Organic sales increased in Baby Care, Feminine Care and Family Care.

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