Procter & Gamble sales disappoint as price hikes slow down

Procter
&
Gamble on
Friday
reported
mixed
quarterly
results
as
it
struggles
to
bring
back
shoppers
after
two
years
of
hiking
prices
across
its
portfolio,
from
Tide
detergent
to
Charmin
toilet
paper.

The
company’s
prices
were
up
3%
compared
with
the
year-ago
period,
although
CFO
Andre
Schulten
said
on
a
media
call
that
P&G
didn’t
institute
any
nationwide
price
hikes
during
the
quarter.

Despite
its
disappointing
sales,
the
consumer
giant
raised
its
full-year
outlook
for
earnings
growth.

Shares
of
the
company
fell
more
than
1%
in
morning
trading.

Here’s
what
P&G
reported
compared
with
what
Wall
Street
was
expecting,
based
on
a
survey
of
analysts
by
LSEG:

• Earnings per
  share:
  $1.52
  vs.
  $1.41
  expected
• Revenue:
  $20.2
  billion
  vs.
  $20.41
  billion
  expected

P&G
reported
fiscal
third-quarter
net
income
attributable
to
the
company
of
$3.75
billion,
or
$1.52
per
share,
up
from
$3.4
billion,
or
$1.37
per
share,
a
year
earlier.

Net
sales rose
1%
to
$20.2
billion.
Organic
sales,
which
strip
out
acquisitions,
divestitures
and
foreign
currency,
increased
3%
in
the
quarter.

But
the
company’s
quarterly
volume
was
flat
for
the
second
consecutive
quarter.
In
October,
executives
said
they
anticipated
returning
to
volume
growth
in
fiscal
2024.
Three
quarters
in,
the
company
hasn’t
yet
lured
back
many
of
the
customers
it
scared
away
with
its
price
hikes
over
the
last
two
years.

However,
three
of
P&G’s
divisions
reported
volume
growth
for
the
quarter.
Its
beauty
segment,
which
includes
Olay
and
Pantene,
saw
volume
rise
1%,
fueled
by
innovation
in
personal
care.
The
company’s
grooming
business,
home
to
its
Gillette
and
Venus
razors,
reported
volume
growth
of
2%.
And
fabric
and
home
care,
which
includes
Febreze
and
Swiffer,
saw
1%
volume
growth.

But
P&G’s
health
care
and
baby,
feminine
and
family
care
divisions
saw
volume
drop
further.
The
company
blamed
its
higher
prices
and
a
weaker
cold
and
flu
season
for
the
declines.

Geography
also
played
a
role
in
the
company’s
lackluster
sales.
China,
the
company’s
second-largest
market,
is
still
seeing
softer
demand
for
products
like
its
pricey

SK-II
skin
care.
Schulten
also
said
that
some
markets,
particularly
in
the
Middle
East,
have
seen
retailers
pull
back
on
promotions
amid
geopolitical
tensions
tied
to
the
war
in
Gaza.

“The
impact
is
visible
but
limited,
and
we
expect
it
to
lessen,
obviously,
hopefully
as
these
tensions
ease
over
time,”
he
said.

In
the
U.S.,
P&G’s
largest
market,
the
company’s
volume
grew
3%.
Schulten
said
the
U.S.
consumer
isn’t
trading
down
or
changing
shopping
behavior.

“Consumers
don’t
want
to
take
a
gamble
when
it
comes
to
the
type
of
performance
…
they
know
ultimately
the
price
for
trading
down,”
he
said.

For
the
full
year,
P&G
is
now
expecting
core
net
earnings
per
share
growth
of
10%
to
11%,
up
from
its
prior
range
of
8%
to
9%.
The
company
also
raised
its
projection
for
unadjusted
earnings
growth
to
a
range
of
1%
to
2%,
up
from
its
previous
forecast
of
down
1%
to
flat.
P&G
maintained
its
outlook
of
2%
to
4%
sales
growth
in
2024.

P&G
also
now
expects
a
$900
million
benefit
from
favorable
commodity
costs,
up
from
its
previous
outlook
of
$800
million.
That’s
a
reversal
from
the
last
two
fiscal
years,
when
commodity
costs
weighed
on
the
company,
leading
to
price
hikes.

Correction:
P&G’s
net
sales rose
1%
to
$20.2
billion.
An
earlier
version
misstated
a
figure.