Procter & Gamble shares rose 1.2% before the market open on Tuesday, after the consumer goods giant beat earnings estimates for its fiscal second quarter as it raised prices again and boosted margins.
The Cincinnati-based parent company of Charmin & Bounty toilet paper, Febreze and Donnie detergents, Gillette shaving products and Pantene PG shampoo,
It reported net income of $3.468 billion, or $1.40 per share, during the quarter ended December 31, down from $3.933 billion, or $1.59 per share, in the same period a year earlier.
Adjusted earnings per share came in at $1.84, well above the FactSet consensus of $1.70.
Sales rose 3% to $21.441 billion from $20.733 billion a year ago, just below the FactSet consensus of $21.476 billion.
By segment, sales rose 6% in the company's grooming business as prices rose 7% and volume rose 1%. Sales in the beauty sector rose 1% after Procter & Gamble raised prices by 4% on average, while volumes remained steady.
Sales in the healthcare division rose 4%, after average prices rose 5%, with volumes down 3%. Fabric and home care sales rose 5% after prices rose 4%. Trading volumes were flat.
Sales in the child, women and family care sector rose by 2% after prices rose by 4%, while volumes fell by 2%.
Gross margin increased 520 basis points during the quarter, driven by the benefits of productivity savings, favorable commodity costs and price increases.
Inflation, as measured by the annual headline CPI rate, has fallen from the peak seen last year, although it has been stuck at or above 3% for seven straight months.
Procter & Gamble revised earnings guidance for fiscal 2024, but stuck to sales forecasts. It now expects EPS to fall 1% to a flat level, compared to previous guidance of 6% to 9%, but expects adjusted EPS to rise from 8% to 9%, narrowing the range from previous guidance of 6%. To 9%.
Sales are still expected to rise 2% to 4% from fiscal 2023.
P&G expects to book restructuring charges ranging from $1.0 billion to $1.5 billion related to the restructuring of its market portfolio of operations, mostly in enterprise markets, including Argentina and Nigeria. Most of the charges will be non-cash and are recognized in the fiscal years ending June 30, 2024 and 2025.
In the second quarter, it booked a $1.3 billion pre-tax non-cash impairment charge related to intangible assets acquired as part of the 2005 acquisition of Gillette.
For more read: Procter & Gamble expects more than $2 billion in restructuring charges and impairment of Gillette's value
The stock is up 4.8% year to date, while the S&P 500 SPX,
It increased by 20.7%.
