New York (AFP) - Higher prices helped Procter & Gamble score increased quarterly profits despite a hit to China sales, and executives on Friday described inflation as having a relatively limited impact thus far on demand.
Chief Executive Jon Moeller alluded to "significant headwinds" faced by the consumer products giant including a strengthening US dollar, higher costs and Covid upheaval, but praised the performance of the firm behind well-known brands like Pampers diapers and Crest toothpaste.
The company "delivered strong top-line growth, earnings growth and significant cash return to shareholders in the face severe cost and operational headwinds," Moeller said in a statement.
Profits in the final quarter of the company's fiscal year rose $3.1 billion, up five percent on revenues of $19.5 billion, which were three percent higher than the year-ago period.
Sales were boosted by an eight percent increase in pricing.
However, P&G executives said sales in China suffered an 11 percent hit due to Covid-19 lockdowns, with the earnings release highlighting the impact in beauty, grooming and health care.
With restrictions in China easing "we are seeing a gradual return to consumer mobility," said Chief Financial Officer Andre Schulten."And that is certainly helping consumption."
Schulten said P&G has seen relatively little incidence of consumers "trading down" to lower-priced products because of inflation.
"You see consumers may be skimp for a period of time, use up inventory," he told reporters on a briefing."But it's more benign than we would have expected based on historical data."
Moeller, in an interview with CNBC, did not discount the possibility that the US economy could be heading into a recession, but said consumers were still showing robustness.
"We've got a very strong labor market.Consumer balance sheets are generally strong," Moeller told the network."So based on that slice that we see, at least some of the US economy, things are very good."
P&G's earnings-per-share of $1.21 missed analyst expectations by two cents, while revenues slightly topped estimates.
Shares fell 4.7 percent to $141.18 just after trading opened.
