Tide, a laundry detergent owned by the Procter & Gamble company, is seen on a store shelf on October 20, 2020 in Miami, Florida.
Joe Raedle | Getty Images
Procter & Gamble on Friday reported mixed quarterly results as the patron products giant faced rising commodity costs and warned it expects such headwinds to persist in its fiscal 2023.
The Cincinnati-based maker of products including Pampers, Pantene and Tide said higher pricing during its fiscal fourth quarter offset a slip in sales volume, which it attributed primarily to Covid pandemic-related lockdowns in China and reduced operations in Russia.
Shares of the corporate closed down about 6%.
Here’s what the corporate reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: $1.21 adjusted vs. $1.22 expected
- Revenue: $19.52 billion vs. $19.4 billion expected
For the three months ended June 30, P&G reported net income of $3.05 billion, or $1.21 per share. Within the year-ago period, it posted net income of $2.91 billion, or $1.13 per share.
Net sales rose 3% from a 12 months ago, driven by organic sales growth of 9% in each its health care and fabric and home-care units, where higher pricing made up for flat and negative volumes, respectively.
During a media call, P&G Chief Financial Officer Andre Schulten attributed the flat and negative volume to the reduction of business in Russia and said he was confident the “consumer is holding up well” as the corporate raised prices.
Still, executives addressed pricing concerns from retailers in the course of the earnings conference call. Schulten said P&G’s discussions with Walmart “remain productive” and that the businesses’ “interests are aligned” in addressing inflation. He said P&G stays committed to protecting its strategy of offering multiple price points for consumers, especially for products similar to diapers.
For its fiscal 2023, P&G expects earnings per share to be flat to up 4%. It projects headwinds of $3.3 billion as a consequence of foreign exchange rates, higher commodity costs and better freight costs.
The corporate expects sales for the 12 months to be flat to up 2% from a 12 months ago. Organic sales, which strips out the impact of foreign exchange rates, is anticipated to be up 3% to five%, driven by pricing.
