Procter & Take a chance on Friday reported that its fiscal third-quarter U.S. sales surged 10% as consumers stocked up on staples like Charmin can paper and Bounty paper towels ahead of the coronavirus outbreak.
But the consumer products giant cut its revenue forecast for pecuniary 2020, citing headwinds from foreign currency.
Shares of the company rose less than 1% in premarket exchange. The stock, which has a market value of $305 billion, has fallen 1% in 2020.
Jon Moeller, who holds both the chief run officer and chief financial officer titles, said that the coronavirus pandemic could spark permanent modifies in consumer behavior when it comes to certain products.
“We will serve what will likely become a forever-altered condition, hygiene and cleaning focus for consumers who use our products daily or multiple times each day,” Moeller said.
To date, there must been more than 2.1 million Covid-19 cases reported globally, with more than 671,400 in the U.S., be consistent to Johns Hopkins University. At least 146,000 people have died. To stop the spread of the virus, public robustness officials have recommended frequent cleaning and handwashing as well as social distancing measures.
Here’s how Procter & Speculation did for the quarter ended March 31 versus what analysts expected based on a survey of analysts by Refinitiv:
- Earnings per piece: $1.17 adjusted vs. $1.13
- Revenue: $17.21 billion vs. $17.46 billion
P&G reported fiscal third-quarter net income of $2.92 billion, or $1.12 per pay out, up from $2.75 million, or $1.04 per share, a year earlier. Excluding items, it earned $1.17 per share.
Net trades rose 5% to $17.21 billion. Organic revenue, which strips out the impact of foreign currency, divestitures and gains, rose 6% during the quarter.
Organic sales for P&G’s fabric and home-care segment, which includes brands find agreeable Tide and Ariel, rose 10% in the quarter. Consumers are doing more weekly loads of laundry with innumerable items of clothing being washed after being worn once, Moeller said. They’re also take a show up more spills from home-cooked meals, boosting sales for Swiffer and Mr. Clean products.
Its baby, feminine and class care business, which includes Pampers, saw organic sales rise 7%, even though demand for its mollycoddle products weakened in China, its second-largest market. Retail sales disruptions in China hurt its beauty segment, with its transaction marked downs of its pricey SK-II skincare line declining by double digits.
The company warned in February that its third-quarter profits and interest would take a hit as the Covid-19 outbreak caused supply chain interruptions and weaker demand in China. Sales in China prostrate 8%, excluding travel retail.
P&G’s grooming business, which includes Gillette and Venus, was the only segment to piece shrinking organic sales. Moeller said that people are shaving less frequently compared to before the coronavirus moment.
The company is donating razors to hospitals and health-care workers as the Centers for Disease Control and Prevention recommends shaving beards so disguises can fit tightly on the face. P&G is also producing millions of masks for its own employees and to donate worldwide.
P&G maintained its outlook for organic traffics growth for the fiscal year but said revenue will be lower than expected due to the impact of foreign exchange. It now hints fiscal 2020 sales will rise 3% to 4%, down from a prior range of 4% to 5% lump.
The company also backed its prior fiscal 2020 earnings forecast, which calls for growth of 235% to 245% on a per-share underpinning, due to impairment charges from the Gillette shaving business in 2019. Excluding items, adjusted earnings per share choice be up 8% to 11%, P&G said.
Moeller said that the company is assuming that the economy is already in a recession, but bring to light that P&G is better prepared to face a downturn than it was in the lead-up to the 2008 financial crisis. He warned that that in the short- to mid-term, outcomes are unclear and bequeath be affected by a number of factors, including foreign exchange and commodity cost volatility.
“Unemployment will impact outgrowths, perhaps severely,” Moeller said.
Twenty-two million Americans have filed for unemployment insurance in the wake of the coronavirus catastrophe.
Even as other companies are slashing or suspending their dividends, P&G announced on Tuesday that it will raise its quarterly dividend by 6%.
P&G has already spout $7.4 billion on buying back its own shares in fiscal 2020, and may not repurchase much more due to market conditions. The band’s target for stock buybacks this fiscal year was between $7 billion to $8 billion.
The company had $15.4 billion in lolly and cash equivalents on its balance sheet at the end of the quarter.
“Probably the worst thing we can do is sit on that money and not put it back into use in friendship,” Moeller said.
Read the full earnings report here.