Procter & Gamble Earnings Beat Forecasts On Firmer Pricing Power

Procter & Gamble  (PG) – Get Free Report posted better-than-expected fourth quarter earnings, and forecast solid near-term profit gains, as the Tide detergent maker continues to offset a pullback in sales volumes with overall price increases for its array of consumer brands.

lifted prices across a range of its brands over the first few months of this year, helping it post better-than-expected third quarter earnings and an improved 2023 sales outlook.

Procter & Gamble said core earnings for the three months ending in June, the group’s fiscal fourth quarter, were pegged at $1.37 per share, a 13.2% increase from the same period last year and 5 cents ahead of the Street consensus forecast.

Group net sales, Procter & Gamble said, rose 5.3% to $20.55 billion, narrowly topping analysts’ estimates of a $20 billion tally. Organic sales were up 7%. Price increases of around 7%, however, helped offset a 1% decline in overall sales volumes, with gross profit margins rising by 380 basis points to 48.4%.

Looking into the group’s 2024 fiscal year, P&G said it forecast organic sales growth of between 4% and 5%, thanks in part to reduced pricing power, with core earnings rising 6% to 9% from the 2023 figure of $5.90 per share.

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“The April-June quarter provided a very strong finish to fiscal year 2023 – top-line growth, bottom-line growth, and cash generation,” said CEO Jon Moeller. “The team met or exceeded our going-in plans for sales, earnings, and cash in a difficult operating environment and despite significant cost headwinds.”

“As we look forward to fiscal 2024, we expect to deliver strong organic sales growth, EPS growth and free cash flow productivity – each in-line with our long-term growth algorithm, despite continued macroeconomic and geopolitical challenges,” he added.

Procter & Gamble shares were marked 1.55% higher in pre-market trading immediately following the earnings release to indicate an opening bell price of $154.46 each.

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