- Procter & Gamble reported falling revenue and profit on Thursday, as higher prices struggled to offset declining sales volumes.
- All of the company’s divisions reported declining sales volume in the quarter.
- The company lifted its outlook for 2023 sales growth to a range of 4% to 5%
Procter & Gamble reported year-over-year declines in revenue and profit on Thursday, as higher prices struggled to offset declining sales volumes.
Shares of P&G fell about 2% in premarket trading.
Here’s how P&G performed in its fiscal second quarter of 2023 compared with what Wall Street anticipated, based on an average of analyst’s estimates compiled by Refinitiv:
- Adjusted earnings per share: $1.59 versus an expected $1.59
- Total revenue: $20.77 billion versus expected $20.73 billion
For the three-month period ended Dec. 31, the company reported net income of $3.9 billion, or $1.59 per share, excluding items, down from $4.22 billion, or $1.66 per share, a year earlier.
Net sales fell 1% to $20.77 billion, topping analyst’s projections of $20.73 billion.
The company’s organic revenue, which excludes the impact of foreign currency, acquisitions and divestitures, increased 5% during the fiscal second quarter. That increase was a result of higher pricing, which outweighed shrinking consumer demand.
All of the company’s divisions reported declining sales volume in the quarter, despite seeing increases in organic sales as a result of higher pricing. Its grooming division, which houses brands like Gillette and The Art of Shaving, and which has historically underperformed for the company, reported no sales growth — its volume declines completely cancelled out its higher prices.
The Cincinnati-based consumer goods giant, which owns brands like Crest toothpaste, Tide laundry detergent, and Pampers diapers, warned in its first quarter report of a $3.9 billion hit to its fiscal year 2023 due to “unfavorable” foreign exchange rates and pricier raw materials, commodities and freight. As a result, the company lowered its guidance, despite posting a solid first quarter.
The company now anticipates headwinds of $3.7 billion for the remainder of its fiscal year, marking a slight improvement. But it warned those headwinds would continue to squeeze P&G’s gross margins, which saw a 160-basis-point decrease during the second quarter versus a year ago.
Still, the company lifted its outlook for 2023 sales growth to a range of 4% to 5% from a prior range of 3% to 5%. The company lowered its estimated impact of foreign exchange to 5% from 6%.
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