Procter & Gamble Co.’s stock rose 1.6% in premarket trade Friday, after the consumer goods giant blew past earnings estimates for its fiscal fourth quarter after again raising prices.
The Cincinnati-based parent of brands including Charmin, Crest and Pampers posted net income of $3.384 billion, or $1.37 a share, for the quarter to June 30, up from $3.052 billion, or $1.21 a share, in the year-earlier period. Adjusted per-share earnings also came to $1.37, ahead of the $1.32 FactSet consensus.
Sales rose to $20.6 billion from $19.5 billion a year ago, ahead of the $20.0 billion FactSet consensus.
“The team met or exceeded our going-in plans for sales, earnings, and cash in a difficult operating environment and despite significant cost headwinds,” Chief Executive Jon Moeller said in a statement.
Sales growth was due to a 7% increase from higher pricing and a 2% increase from favorable mix, partially offset by a 1% decline in shipment volumes, he said.
Gross margin increased 380 basis points from a year ago, driven by 340 basis points of pricing benefit and 290 basis points of productivity savings.
Companies, especially consumer companies, have been criticized this year for what is being called “greedflation,” or the practice of raising prices to protect profits that has allowed them to boost margins through the current inflationary period.
“We remain committed to our strategy — a focus on daily use categories where performance drives brand choice, superiority (of product, package, communication, go-to-market execution and value), productivity, constructive disruption, and an agile and accountable organization structure and culture — all in pursuit of sustainable, balanced growth and value creation,” said Moeller.
Read also: Consumers are shopping in more stores than ever before to save money
By category, beauty sales rose 8% in the quarter as the company raised prices by 8%. Grooming sales were up 3% after a 9% hike in prices.
Healthcare sales rose 3% after a 6% hike in prices. Fabric & home care sales were up 5% after a 6% price hike, while baby, feminine and family care sales rose 7% after the company raised prices by 8%.
The company is now expecting fiscal 2024 EPS to increase 5% to 9% to a range of $6.25 to $6.43. Sales are expected to rise 3% to 4%.
The FactSet consensus is for fiscal 2024 EPS of $6.37 and a sales rise of 3.6%.
The stock
PG,
has gained 0.4% in the year through Thursday’s close, while the S&P 500
SPX,
has gained 18%.
This post was originally published on Market Watch
