As Prices Rise, Procter & Gamble Beats Earnings Estimates

As higher prices offset lower demand, Procter & Gamble on Friday beat analysts' estimates for its quarterly earnings and revenue.

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As well as raising its forecast for organic sales growth for fiscal 2023 to 6%, the company, whose brands include Febreze, Charmin, and Tide, also increased its prior range of 4% to 5%.

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In premarket trading, shares of P&G rose 2%.

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Using a Trade Algo analyst survey, here are the company's results for the quarter that ended March 31 compared with what Wall Street expected:

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Earnings: $1.37 vs. expected $1.32

Revenue: $20.07 billion vs. expected $19.32 billion

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An increase of $3.4 billion, or $1.37 per share, was reported by P&G for the third quarter, up from $3.36 billion, or $1.33 per share, in the same period last year.

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The company's net sales increased by 4% to $20.07 billion. As a result of the quarter's acquisitions, divestitures, and foreign currency changes, organic sales increased by 7%.

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Consumers opted for cheaper alternatives, which led to a 3% drop in volume, excluding price and currency changes. Prices across P&G's portfolio rose 10% year over year.

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During this quarter, the consumer giant saw its volume shrink for the fourth consecutive time.

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In a press conference, CFO Andre Schulten stated that volume had improved sequentially in comparison to the second quarter of fiscal 2017. Moreover, he added that while P&G's quarterly volume fell only 2% from last year, it would have fallen even more had it not been for P&G's operations and advertising in Russia, which were curtailed since the Kremlin began the conflict in Ukraine last spring.

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There was a decline in volume in all of P&G's divisions for the quarter, with the exception of its health and beauty units, both of which experienced just a one percent volume growth.

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However, Schulten said that volume increased in the biggest market for the company, the United States. The second-largest market for P&G, China, has also shown signs of improvement after Covid lockdowns, and consumer confidence has improved.

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In the third quarter of its fiscal year, P&G increased the price of its consumer products in the United States and Europe once again, Schulten said.

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Tide, Swiffer, and Mr. Clean are among the firm's home care brands. The segment's volume fell the steepest of all the company's business units by 5%. It was primarily Europe that saw volume declines, according to P&G.

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It reported a volume decline of 4% for the babies, feminine care, and family care segment. Pampers, Bounty, and Charmin, which are part of the division, also saw volume declines in Europe. There was a decrease in demand for the company's diapers, according to the company.

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A 1% decline in volume was reported by P&G's grooming business, which includes Gillette and Venus razors. In the past, the unit has lagged behind P&G's other units, but this quarter it performed better than before. Nevertheless, a decline in demand caused its volume to decline.

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