Consumers spent more money on toothpaste last quarter than they did a year ago, P&G said.
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Procter & Gamble said higher commodity prices and freight costs would weigh on profits in the next fiscal year, as the consumer-goods giant posted strong results for the past quarter on Friday, with sales and earnings outpacing Wall Street’s expectations.
Shares in P&>, a constituent of the Dow Jones Industrial Average, rose near 1.5% in premarket trading. The stock is up 1.2% so far in 2021 and has climbed more than 6% in the last 12 months.
The group saw sales of $18.9 billion in the April to June period, which is the fourth quarter of its 2021 fiscal year, up 7% from the same period a year ago and beating analyst expectations of around $18.4 billion. Diluted earnings per share was $1.13, a 6% rise from $1.07 in the 2020 quarter, ahead of estimates of $1.08.
P&> said that its skin and personal care as well as oral care segments all notched double-digit sales increases from a year ago, in part due to changes in consumer behavior as the worst of the Covid-19 pandemic passed.
“We delivered another year of strong results with balanced top and bottom-line growth and strong cash generation, exceeding each of our ingoing targets,” said David Taylor, P&>’s president and chief executive. “As we look forward to fiscal 2022, we expect to continue to grow top-line and bottom-line and to deliver another year of strong cash return to shareholders despite a challenging cost and operating environment.”
Also read: Lysol Maker Reckitt Warns About Inflation. What It Means for P&> and PepsiCo.
The company said that it expects sales growth of 2% to 4% in the 2022 fiscal year, with diluted net EPS growth of 6% to 9%. The group’s current outlook also includes headwinds of approximately $1.9 billion after tax from higher commodity prices and freight costs. These inflated costs, partially offset by positive foreign exchange effects, will weigh on EPS to the tune of around $0.70 per share, P&> said.
Producers have had to spend more money on commodities and shipping in recent months, which has come in tandem with rising inflation, and P&>’s outlook mirrors challenges faced by other consumer-goods groups like Unilever and Reckitt Benckiser.
P&> will host its earnings conference call at 8:30 a.m. Eastern.
Write to Jack Denton at [email protected].
