In this photo illustration, the Procter and Gamble logo is displayed on a smartphone with stock market percentages in the background.
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Procter & Gamble reported a year-over-year decline in revenue and earnings on Thursday as higher prices struggled to offset lower sales volumes.
Shares of P&G fell about 1% in premarket trading.
Here’s how P&G fared in the second fiscal quarter of 2023 compared to what Wall Street expected, based on average analyst estimates compiled by Refinitiv:
- Adjusted earnings per share: $1.59 vs. expected $1.59.
- Total income: $20.77 billion vs. expected $20.73 billion.
For the three-month period ended Dec. 31, the company reported net income of $3.9 billion, or $1.59 per share, excluding items, compared to $4.22 billion, or $1.66 per share. a year earlier.
Net sales fell 1% to $20.77 billion, beating analysts’ forecasts of $20.73 billion.
The company’s organic revenue, which excludes the impact of foreign exchange, acquisitions and sales, increased by 5%. during the second financial quarter. This increase was the result of higher prices, which outweighed the decline in consumer demand.
The Cincinnati-based consumer products giant, which owns brands like Crest toothpaste, Tide laundry detergent and Pampers diapers, warned in its first-quarter report of $3.9 billion in fiscal 2023 damage due to “adverse” exchange rates. and more expensive raw materials. materials, goods and cargo. As a result, the company lowered its forecast, despite the good results of the first quarter.
But so far this year, those headwinds have begun to ease. The cost of freight, goods and raw materials began to decline as the supply chain improved. The dollar also weakened against other major currencies, offsetting an exchange rate that was eating into revenue.
The company raised its 2023 sales growth forecast to a range of 4% to 5% from the previous range of 3% to 5%. The Company reduced the estimated impact of foreign exchange rates from 6% to 5%.
All divisions of the company reported lower sales volume in the quarter, despite an increase in organic sales as a result of higher prices. The hair care division, which features brands such as Gillette and The Art of Shaving and has historically been underperforming for the company, reported no increase in sales at all – lower volume fully offset higher prices.
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