Procter & Gamble, the parent company of popular household brands such as Tide, Charmin, and Febreze, has reported quarterly earnings and revenue that exceeded analysts’ expectations. The company’s higher prices have helped offset the lower demand for its products, especially in Europe. Despite a decline in volume, the company has raised its forecast for organic sales growth for the fiscal year 2023 to 6%, up from its prior range of 4% to 5%.
Quarterly Results
P&G reported fiscal third-quarter net income of $3.4 billion, or $1.37 per share, up from $3.36 billion, or $1.33 per share, in the previous year. The company’s net sales rose by 4% to $20.07 billion, while organic sales increased by 7% in the quarter, excluding the effects of foreign currency, acquisitions, and divestitures. However, the company’s volume, which excludes price and currency changes, fell by 3% as consumers opted for cheaper alternatives.
Across its portfolio, P&G’s prices were up by 10% year over year. The company raised prices again in the U.S. and Europe during the fiscal third quarter. CFO Andre Schulten said during a press call that this marks the fourth consecutive quarter of shrinking volume for the consumer giant. However, he downplayed the volume declines and struck an optimistic tone, saying that consumption trends have stabilized globally.
Regional Performance and Divisional Declines
Schulten noted that volume increased sequentially from the company’s fiscal second quarter. Volume improved in the U.S., the company’s largest market, and China, its second-largest market. However, Europe remains a pain point as consumers there trade down to cheaper private-label goods.
All of P&G’s divisions reported declining volume for the quarter, except for its health and beauty units, which both saw volume increase by just 1%. P&G’s fabric and home care segment, which includes brands like Tide, Swiffer, and Mr. Clean, saw its volume fall by 5%, with the steepest drop among the company’s business units. The baby, feminine, and family care segment reported a 4% volume decline, with lower demand for diapers in Europe. P&G’s grooming business, which includes Gillette and Venus razors, reported a 1% drop in volume due to lower demand for its appliances.
Despite these declines, P&G’s quarterly earnings and revenue exceeded analysts’ expectations, and the company has raised its forecast for organic sales growth for the fiscal year 2023.
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