Procter & Gamble Stock Slides After Narrow Q4 Profit Miss, Muted Outlook

Procter & Gamble said it sees around $3.3 billion in foreign currency headwinds for its coming fiscal year as the strong dollar continues to blunt U.S. earnings growth.

Procter & Gamble Co.  (PG) – Get Procter & Gamble Company (The) Report posted modestly softer-than-expected fourth quarter sales Friday, while hinting to currency and inflationary pressures in the months ahead, even as its overall consumer brand sales topped Street forecasts. 

Procter & Gamble said core earnings for the three months ending in June, the company’s fiscal fourth quarter, came it at $1.21 per share, up 7.1% from the same period last year but a penny shy of the Street consensus forecast. Group revenues, the company said, rose 2.9% to $19.5 billion, topping analysts’ estimates of an $19.4 billion tally.

Looking into the group’s 2022 fiscal year, P&G said it sees core earnings growth of between flat  and 4% from the $5.81 per share recorded in fiscal 2022. Organic sales will grow between 3% to 5%, the company said, with a foreign currency headwind of around $3.3 billion owing to the strength of the U.S. dollar. 

Procter & Gamble also said it was able to pass on aggregate price increases of around 8% across its product categories in order to blunt the impact of the fastest consumer inflation in more the four decades.

“Fiscal year 2022 was another strong year,” said Jon Moeller, Chairman of the Board, President and Chief Executive Officer. “The P&G team’s execution of our integrated strategies delivered strong top-line growth, earnings growth, and significant cash return to shareowners in the face of severe cost and operational headwinds.”

“As we look forward to fiscal 2023, we expect another year of significant headwinds,” he added. “We remain committed to our integrated strategies of superiority, productivity, constructive disruption and an agile and accountable organization structure.”

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Procter & Gamble shares were marked 4.23% lower in pre-market trading immediately following the earnings release to indicate an opening bell price of $141.80 each.

Fabric and home care sales, which include cleaning products such as Tide laundry detergent, Joy, Febreze and Cascade, rose 4% from last year, while baby, feminine and family care segment sales were 2% higher from 2021 levels.

Beauty sales were flat to last year, the company said, while personal grooming sales, which includes skin care products, rose 1% from last year. 

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