Procter & Gamble earnings rise as it again raises prices and boosts margins

The company posted net income of $4.521 billion, or $1.83 a share, for the quarter to Sept. 30, up from $3.963 billion, or $1.57 a share, in the year-earlier period. Adjusted per-share earnings also came to $1.83, well ahead of the $1.72 FactSet consensus.

Sales rose 6% to $21.871 billion from $20.612 billion, also ahead of the $21.580 billion FactSet consensus.

Sales were boosted after the company raised prices by an average of 7% for a second straight quarter.

“We delivered very strong results in the first quarter of fiscal year 2024, putting us on track to deliver towards the higher end of our fiscal year guidance ranges for organic sales and core EPS growth,” Chief Executive Jon Moeller said in a statement.

Sales in the company’s beauty segment rose 3%, while sales in the grooming segment rose 6% after it raised prices by 9%.

Sales from health care rose 11%, while sales at fabric & home care were up 8%. Sales in the baby, feminine and family-care segment rose 5%.

Gross margin increased 460 basis points from the year-earlier, driven by higher pricing, favorable commodity costs and productivity savings.

The company said it now expects full-year sales to grow 2% to 4%, compared with prior guidance of 2% to 4%. It still expects EPS of $6.25 to $6.43, which compares with a FactSet consensus of $6.39.

The company is sticking with that guidance despite an incremental $600 million of forex headwinds since it first offered guidance in late July. 

P&G’s stock has fallen 4% in the year to date, while the S&P 500
SPX
has gained 13.7%. But the stock is up 14% over the last 12 months, while the S&P 500 has gained 18.7%.

Of the 18 analysts that offer ratings for the stock on FactSet, 10 rate it a buy, seven rate it as hold and one has an underweight, or sell, rating.

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