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 consumer 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 company closed down about 6%.
Here’s what the company 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. In the year-ago period, it posted net income of $2.91 billion, or $1.13 per share.
Net sales rose 3% from a year ago, driven by organic sales growth of 9% in both 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 company raised prices.
Still, executives addressed pricing concerns from retailers during the earnings conference call. Schulten said P&G’s discussions with Walmart “remain productive” and that the companies’ “interests are aligned” in addressing inflation. He said P&G remains committed to protecting its strategy of offering multiple price points for consumers, especially for products such as diapers.
For its fiscal 2023, P&G expects earnings per share to be flat to up 4%. It projects headwinds of $3.3 billion due to foreign exchange rates, higher commodity costs and higher freight 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 foreign exchange rates, is expected to be up 3% to 5%, driven by pricing.