Price hikes across the board continued to boost sales at Procter & Gamble during its fiscal fourth quarter.
The consumer goods giant, whose brands include Oral-B, Head & Shoulders, Olay, Gillette and Pampers to name just a few, reported net sales between April and June were $20.6 billion, an increase of 5 percent versus the prior year and a touch above the $20 billion forecasted by analysts polled by Factset.
Organic sales, which exclude the impacts of foreign exchange and acquisitions and divestitures, increased 8 percent, due to a 7 percent increase from higher pricing as P&G, like much of the industry, continues to raise prices in the face of high inflation. However, volume sales slipped 1 percent.
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Within that, beauty organic sales increased 11 percent. Hair care rose by high-single digits due primarily to increased pricing, but partially offset by volume declines in Asia Pacific. Skin and personal care sales were up by the low teens on the back of higher prices, a positive mix from the growth of SK-II (versus a prior year period impacted by pandemic-related lockdowns) and volume growth from innovation.
Grooming sales, meanwhile, increased 8 percent, again mainly because of rising prices, partially offset by volume declines and trade disruptions in Europe.
Diluted net earnings per share were $1.37, an increase of 13 percent and above expectations of $1.32.
The company reported fiscal year 2023 net sales of $82 billion, up 2 percent from the prior year. Diluted net earnings per share were $5.90, an increase of 2 percent.
“The April to June quarter provided a very strong finish to fiscal year 2023 — top-line growth, bottom-line growth and cash generation,” said Jon Moeller, chairman of the board, president and chief executive officer. “The team met or exceeded our going-in plans for sales, earnings and cash in a difficult operating environment and despite significant cost headwinds.”
P&G expects fiscal year 2024 all-in sales growth in the range of 3 to 4 percent versus the prior year. Wall Street had penciled in 4.5 percent.
During a call with analysts, chief financial officer Andre Schulten said: “As we’ve said in each guidance outlook for the past three years, and as Jon indicated, we will undoubtedly experience more volatility in the fiscal year ahead. And while supply chains and input costs have become more stable as we enter fiscal 2024, the challenges we face are multifaceted, economic, geopolitical and societal putting pressure on consumer confidence and household budgets.”
Nevertheless, the company still appears to be very open to acquisitions, especially on the skin care front.
Answering a question from an analyst, Moeller said: “We have said that from a portfolio standpoint, there are two categories that we’re most interested in from an acquisition standpoint, albeit in a very disciplined way. And those are the same two categories where we’ve been making smaller acquisitions. Those two categories are personal health care and skin care.”