According to the CEO of the consumer goods mainstay, Procter & Gamble retains the right strategies to deliver balanced growth.
On Friday, April 21, Procter & Gamble (NYSE: PG) reported its fiscal Q3 2023 earnings, which showed the company beat estimates. The multinational consumer goods corporation’s quarterly earnings and revenue came in better than expected, with higher prices counterbalancing lower demand for its products. Following this commendable performance, P&G raised its fiscal 2023 sales guidance and revenue forecast.
P&G’s shares were up 2% in premarket trading after the company raised the organic sales growth forecast for the fiscal year to 6%. Previously, the company had put this figure between 4% and 5%.
Quarterly Report Details
For fiscal Q3 2023, Procter & Gamble realized a revenue haul of $20.07 billion compared to the $19.32 billion analysts expected. The latest revenue intake is a 4% increase year-over-year (YoY), with organic sales also increasing by 7% in the same period. In addition, the Cincinnati-based consumer goods giant also realized earnings per share (EPS) of $1.37 versus $1.32 EPS expected. Furthermore, Procter & Gamble reported a fiscal Q3 net income of $3.4 billion which outstrips the $3.36 billion the company made a year earlier.
However, P&G sustained a decline in sales volume due to 10% higher prices that drove buyers to seek cheaper options. This is the fourth straight quarter that P&G is experiencing waning sales volumes, selling fewer goods than intended.
Procter & Gamble CFO Andre Schulten explained a sequential increase in sales volume from the company’s fiscal second quarter. Schulten added that quarterly volume declined 2% from 2022 after P&G cut back on advertising and operations. However, the CFO pointed out a significant volume increase in P&G’s largest market, the US, with China on the mend. According to Schulten, the consumer goods giant’s second-largest market is in recovery mode from the pandemic-induced lockdowns.
All the company’s divisions, except health and beauty units, reported waning sales for fiscal Q3 2023. Procter & Gamble’s fabric and home care segment suffered the steepest drop, at 5%, as volume declined mainly in Europe.
Procter & Gamble Head Comments on Fiscal Q3 2023 Performance
Weighing in on overall fiscal third-quarter performance, Procter & Gamble Chairman of the Board, President and Chief Executive Officer Jon Moeller said:
“We delivered strong results in the third quarter of the fiscal year 2023 in what continues to be a very difficult cost and operating environment. Our team’s strong execution of our strategies and our progress through three quarters enable us to raise our fiscal year outlook for sales growth and cash return to shareowners and maintain our guidance range for EPS growth despite continued cost and foreign exchange headwinds.”
Moeller added that P&G remains committed to “integrated strategies of a focused product portfolio of daily use categories.” According to him, performance fuels brand choice here, alongside productivity, superiority, constructive disruption, and a fluid organizational structure. Moeller believes that P&G can leverage the strong momentum it has built and sustained to deliver balanced growth and value creation.
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