In this illustration, Pantene and Head & Shoulders hair products are displayed on July 28, 2023 in San Anselmo, California.
Justin Sullivan | Getty Images
Procter & Gamble Company On Friday, it reported mixed quarterly results as it struggled to bring back shoppers after two years of price hikes across its portfolio, from Tide detergent to Charmin toilet paper.
The company's prices were up 3% year-over-year, though CFO Andre Scholten said on a media call that P&G did not make any price hikes nationwide during the quarter.
Despite its disappointing sales, the consumer giant raised its profit growth forecast for the full year.
The company's shares fell 1% in pre-market trading.
Here's what P&G reported compared to what Wall Street was expecting, based on a survey of analysts conducted by LSEG:
Earnings per share: $1.52 vs. $1.41 expected Revenue: $20.2 billion vs. $20.41 billion expected
Procter & Gamble reported fiscal third-quarter net income attributable to the company of $3.75 billion, or $1.52 per share, up from $3.4 billion, or $1.37 per share, a year earlier.
Net sales rose 1% to $20.41 billion. Organic sales, which exclude acquisitions, divestitures and foreign exchanges, rose 3% in the quarter.
But the company's quarterly volume remained flat for the second straight quarter. In October, executives said they expected to return to volume growth in fiscal 2024. Three quarters later, the company has yet to attract many of the customers it has been spooked by price hikes over the past two years.
However, three of P&G's divisions reported volume growth during the quarter. The beauty sector, which includes Olay and Pantene, saw volume rise by 1%, driven by innovation in personal care. The company's grooming business, home to Gillette and Venus razors, posted volume growth of 2%. Fabric and home care products, which include Februaryize and Swiffer, saw volume growth of 1%.
But Procter & Gamble's healthcare, child care, women's and family divisions saw an even larger decline in volume. The company blamed rising prices and weak cold and flu season for the decline.
Geography also played a role in the company's lackluster sales. China, the company's second-largest market, continues to see declining demand for products such as its expensive SK-II skin care products. Scholten also said some markets, especially in the Middle East, have seen retailers pull back on promotions amid geopolitical tensions related to the war in Gaza.
He added: “The impact is clear but limited, and we expect it to decrease, hopefully, as these tensions subside over time.”
In the United States, Procter & Gamble's largest market, the company's turnover increased by 3%. Scholten said the American consumer is not trading or changing their shopping behavior.
“Consumers don't want to gamble when it comes to what kind of performance…they ultimately know what price to trade for,” he said.
For the full year, P&G now expects core net earnings per share growth of 10% to 11%, up from the previous range of 8% to 9%. The company also raised its forecast for unadjusted earnings growth to a range of 1% to 2%, compared to its previous forecast of a decline of 1% to flat. P&G maintained its sales growth forecast of 2% to 4% in 2024.
P&G also now expects to realize a $900 million benefit from favorable commodity costs, up from its previous forecast of $800 million. This is a reflection of what happened in the last two financial years, when commodity costs took a toll on the company, sending prices higher.
