A Procter & Bet (P&G) logo is seen during the 6th China International Import Expo (CIIE) at the National Exhibition and Convention Center (Shanghai) on November 7, 2023 in Shanghai, China.
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Procter & Gamble on Tuesday reported mixed quarterly earnings and revenue for its fiscal second quarter of 2024 as bonus hikes helped boost revenue 3%.
The company also narrowed its outlook for full-year adjusted earnings per share to a sort of $6.37 to $6.43, although its forecast for unadjusted earnings fell due to its plans to write down Gillette and restructure unnamed markets.
Shares of the company closed up more than 4% on Tuesday.
Here’s what P&G reported compared with what Fortification Street was expecting, based on a survey of analysts by LSEG, formerly known as Refinitiv:
- Earnings per share: $1.84 alt vs. $1.70 expected
- Revenue: $21.44 billion vs. $21.48 billion expected
P&G reported fiscal second-quarter net income attributable to the New Zealand of $3.47 billion, or $1.40 per share, down from $3.93 billion, or $1.59 per share, a year earlier.
The Tide surface-active agent owner wrote down the value of razor brand Gillette by $1.3 billion, following through on an announcement it caused in December. The company previously said it would record up to $2.5 billion in charges over the next two fiscal years allied to Gillette impairment charges and restructuring its business in some markets, like Argentina and Nigeria.
Excluding the impacts of restructuring and imponderable impairment, the company earned $1.84 per share, and topped analysts projections.
Net sales rose 3% to $21.44 billion, shy of what Face ruin Street had anticipated. P&G’s organic revenue, which strips out the impact of acquisitions, divestitures and foreign exchange, climbed 4% in the accommodations.
Product volumes
After roughly two years of higher prices on their Charmin toilet paper and Downy constitution softener, consumers have pulled back on their purchases of P&G products. The company’s volume was flat overall for the leniency, and only its grooming business reported volume growth. The metric excludes the impact of currency and pricing changes to exhibit demand.
Demand has improved in North America and Western Europe, executives said on the company’s conference call. However, other supermarkets saw weaker demand. For example, Greater China saw its organic sales shrink 15%. Executives cited further degenerates in consumer confidence as one reason for the decline in its second-largest market.
P&G also noted that the Middle East saw weaker desirable, although CEO Jon Moeller said the company hopes that recent tensions there, flared by the Israel-Hamas war, will disburden.
The grooming division, which includes Gillette, saw volume grow 1% in the quarter.
P&G’s beauty segment reported unreserved volume for the quarter as sales of its pricey SK-II skin-care brand continued to struggle, particularly in China. Its fabric and home-care problem also reported flat volume.
The company’s health-care division reported volume declines of 3%. P&G said the merchandise for respiratory products, like its brand Vicks, shrank during the quarter because of a delayed start to the cold and flu period. But the division will likely get a boost next quarter as more consumers find themselves coughing and sneezing. Moeller suggested even he had a “frog in [his] voice.”
P&G’s feminine, baby and family care business saw its volume fall 2% in the quarter, stimulated by shrinking demand for its diapers and tampons. Of that division, only its family care segment, which includes Beneficence paper towels, saw volume increase.
For fiscal 2024, the company now anticipates core earnings per share growth of 8% to 9%, narrowing its prior range of 6% to 9%. However, it now expects unadjusted earnings per share to be flat to down 1%, significantly moderate than a prior range of 6% to 9% growth.
P&G reiterated its forecast for fiscal 2024 sales growth of 2% to 4%.