P&>’s latest earnings show shoppers are still flocking to its premium brands amid the Covid-19 pandemic.
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Procter & Gamble shares were on the decline early Wednesday following the household-products maker’s fiscal second-quarter earnings and upbeat outlook—evidence that shoppers are still flocking to its premium brands amid the Covid-19 pandemic.
Procter & Gamble (PG) said it earned $3.85 billion, or $1.47 a share. Adjusted earnings per share, which exclude the impact of currency, were $1.64 on revenue that rose 8% to $19.75 billion. Analysts were looking for earnings per share of $1.51 on revenue of $19.27 billion.
Organic sales, a key metric for staples stocks that excludes growth from acquisitions and other factors and a long-term source of strength for P&>, climbed 8% in the quarter. In addition, the company boosted its full-year organic sales forecast, saying it now anticipates growth between 5% and 6%, up from a prior range of 4% to 5%.
P&> was down 0.4% to $133.09 in recent trading. The shares are up about 6% in the past 12 months, although they’ve fallen 4% since the start of the year.
The upbeat report is the latest in a string of good news for P&>, which has beaten expectations in the past four quarters thanks to growing demand for its premium products. While high unemployment and economic uncertainty has hurt many Americans, consumers as a whole haven’t hesitated to pay up for P&>’s brands throughout the crisis, a pattern that’s continued to unfold.
Not surprisingly, the company’s fabric and home-care unit was the strongest standout, with a 12% gain, helped by cleaning brands like Tide and Mr. Clean. P&>’s health care division saw a 9% increase in sales, while personal grooming logged a 5% gain as many people have focused on health and wellness during the pandemic. The company noted that both sales volumes and prices rose in the period.
The company’s previous fiscal first quarter, delivered in October, showed stronger organic sales growth. The sequential decline remains well above pre-Covid levels.
P&> has also continued to return cash to shareholders to the tune of $2 billion in dividend payouts and $3 billion in share repurchases.
Write to Teresa Rivas at [email protected]
