Bottles of Tide detergent, a product of Procter & Gamble, go on sale at a drug store on July 30, 2020 in Los Angeles, California.
Mario Tama | Getty Images
Procter & Gamble reported mixed quarterly results on Friday as the consumer products giant grappled with rising raw material costs and warned it expects those headwinds to persist into its 2023 fiscal year.
The Cincinnati-based maker of products including Pampers, Pantene and Tide said higher prices in its fiscal fourth quarter offset a decline in sales volume, which it attributed mainly to pandemic-related lockdowns in China and the reduction of operations in Russia.
The company’s shares were down about 6% in morning trading.
Here’s what the company reported compared to what Wall Street expected, according to a survey of analysts by Refinitiv:
Earnings per share: Adjusted $1.21 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. In the one-year period, it reported net income of $2.91 billion, or $1.13 per share.
Net sales increased 3% from a year ago, driven by organic sales growth of 9% in both the healthcare and home care and tissue units, where higher prices offset flat and negative volumes, respectively.
During a media call, P&G CFO Andre Schulten attributed the flat, negative volume to reduced business in Russia and said he was confident the “consumer is holding up well” as the company increased prices.
Still, executives addressed the retailer’s pricing woes during their earnings conference call. Schulten said P&G’s discussions with Walmart “remained productive” and that “the companies’ interests are aligned” to address inflation. He said P&G remains committed to protecting its strategy of offering multiple price points for consumers, especially for products like diapers.
For its fiscal year 2023, P&G expects earnings per share to be flat to 4%. It anticipates headwinds of $3.3 billion due to exchange rates, higher raw material costs and higher transportation costs.
The company expects sales for the year to be flat to up 2% from a year ago. Organic sales, which strips out the impact of exchange rates, are expected to rise 3% to 5%, driven by prices.
Read the full earnings release here.
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