P&G organic sales up on higher pricing

Procter & Gamble has reported 5 per cent increase in its organic sales in the second quarter, mainly driven by higher prices.

Net sales however declined 1 per cent year on year to $20.8 billion (£16.85bn), on account of the unfavorable foreign exchange which had a 6 per cent impact on net sales.

The increase in organic sales, which exclude the impacts of foreign exchange and acquisitions and divestitures, was driven by a 10 per cent increase from higher pricing and a 1 per cent increase from positive product mix, partially offset by a 6 per cent decrease in shipment volumes.

Diluted net earnings per share decreased by 4 per cent to $1.59, driven by the decline in net sales and a decrease in operating margin partially offset by a lower effective tax rate and a reduction in shares outstanding. Currency-neutral EPS were up 5 per cent versus the prior year EPS.

The company has maintained its profit outlook and increased the sales outlook for the 2023 fiscal.

“We delivered solid results in the second quarter of fiscal year 2023 in what continues to be a very difficult cost and operating environment,” said Jon Moeller, president and chief executive of P&G.

“Progress against our plan fiscal year to date enables us to raise our sales growth outlook for fiscal 2023 and maintain our guidance range for EPS growth despite significant headwinds.”

P&G raised its guidance for fiscal 2023 all-in sales to a range of down 1 per cent to in-line versus the prior fiscal year from a prior range of down 3 per cent to down 1 percent. The company also raised its outlook for organic sales growth to a range of 4 to 5 per cent versus the prior fiscal year from a prior growth range of 3 to 5 per cent.

P&G maintained its outlook for fiscal 2023 diluted net EPS growth in the range of in-line to up 4 per cent versus fiscal 2022 EPS of $5.81. The company added that given continued significant cost headwinds from commodity and materials costs and foreign exchange impacts, it continues to expect EPS results to be towards the lower end of the fiscal year guidance range.