Procter & Gamble Co. (PG) posted stronger-than-expected first quarter earnings Wednesday, while boosting its full-year sales forecast, as the consumer staples group sees firming demand and price increases that could offset rising commodity costs.
Procter & Gamble said core earnings for the three months ending in March, the company's fiscal third quarter, came it at $1.33 per share, up 5.5% from the same period last year and 3 cents ahead of the Street consensus forecast of $1.30 per share. Group revenues, the company said, rose 7% to $19.4 billion, again topping analysts' estimates of an $18.72 billion tally.
Looking into the group's 2022 fiscal year, P&G reiterated its previous profit forecast, which see core earnings growth of between 3% and 6%, and a 4% to 5% improvement in organic sales growth, up 100 basis points from its prior estimate.
Building on the strength of our brands, we are thoughtfully executing tailored price increases. We closed a couple of price increases with innovation to improve consumer value along the way," CFO Andre Schulten told investors on a conference call. "The strategic need for investments to continue to strengthen the superiority of our brands, the short-term need to manage through this challenging cost environment and the ongoing need to drive balanced top and bottom line growth, including margin expansion, underscore the importance of ongoing productivity."
"We said each quarter that we will undoubtedly experience more volatility as we move through the fiscal year. We've seen another step in cost pressures, and foreign exchange rates have moved further against us. Transportation and labor markets remain tight," he added. "Availability of materials remain stretched in some categories and markets. Inflationary cost pressures are broad-based and continue to increase with little sign of near-term relief and have resulted in consumer price increases across CPG categories and beyond."
Procter & Gamble shares were marked 2.85% higher in late afternoon trading Wednesday following the earnings release to change hands at $164.20 each, the highest since February 4.
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.
