Procter & Gamble sales rise slightly, fueled by higher prices

Procter & Gamble on Friday reported quarterly earnings and revenue that beat analysts’ expectations, thanks to price hikes for products like Crest toothpaste and Pampers diapers.

But the company released a gloomy outlook for its fiscal 2024 sales that fell short of Wall Street’s estimates.

Still, shares of P&G rose 1.5% in premarket trading.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

• Earnings per share: $1.37 vs. $1.32 expected
• Revenue: $20.55 billion vs. $19.98 billion expected

The Tide detergent owner reported fiscal fourth-quarter net income of $3.38 billion, or $1.37 per share, up from $3.05 billion, or $1.21 per share, a year earlier.

Net sales rose 5% to $20.55 billion. Its organic revenue, which strips out the impact of foreign currency, acquisitions and divestitures, increased 8% in the quarter.

For fiscal 2024, P&G is forecasting that its revenue will grow 3% to 4%, lower than Wall Street’s expectations of 4.5% sales growth. The company is also projecting earnings per share growth of 6% to 9%, which is on the lower end of analysts’ forecast of 8.8%.

But one bright spot is a $400 million after-tax benefit from favorable commodity costs, even including currency tail winds.

For roughly two years, P&G has been raising prices on its products to mitigate higher commodity costs. Yet customers haven’t been as willing to stick with P&G’s brands, leading to five consecutive quarters of volume declines. Volume excludes the impact of currency and pricing changes to reflect demand.

P&G’s volume fell 1% during the quarter.

The company’s health-care segment reported the largest drop in volume at 3%. The division, which includes Oral-B and Pepto-Bismol, scared off North American customers with its higher prices, according to P&G. Europe and Asia-Pacific also saw market contractions.

P&G’s fabric and home-care business, which includes Tide and Febreze, saw its volume fall 2%. The company said customers in China were buying fewer fabric-care products, like Bounce dryer sheets and Downy detergent.

The company’s grooming segment, which includes Gillette and Venus razors, reported its volume shrank 1% in the quarter.

P&G’s baby, feminine and family care and beauty segments reported flat volume for the quarter.