Procter & Gamble Reports Fourth-Quarter Earnings: Sales Beat Estimate

The Procter & Gamble Company PG has released results for the fourth quarter of fiscal 2022. The top line exceeded expectations, but the bottom line fell short. Sales and earnings, however, increased year over year.

Sales growth, strong pricing, and a favorable mix contributed to the results. The outcomes have also been helped by increased productivity despite cost pressures. The management has released the fiscal 2023 outlook.

Q4 in Detail

Core earnings at Procter & Gamble were $1.21 per share, up 7% from $1.13 in the same quarter last year. Higher sales and fewer outstanding shares, which are somewhat offset by a lower operating margin, can be attributed to this. The amount fell short of the $1.23 Zacks Consensus Estimate.

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Net EPS in currency was up 12% over the previous year. The company reported net sales of $19,515 million, exceeding the Zacks Consensus Estimate of $19,393 million and growing by 3% yearly. In addition to strong pricing and a favorable mix, the sales increase was attributed to success across all segments except Grooming and Beauty.

Organically speaking (i.e., excluding the effects of acquisitions, divestitures, and foreign exchange), revenues increased by 7%, supported by an 8% increase in pricing, offsetting a 1% decline in volume because of lockdowns brought on by the pandemic in Greater China and scaled-back operations in Russia.

The corporation’s product mix negatively impacted the quarter’s sales growth. Baby, Feminine & Family Care, Health Care, and Fabric & Home Care all saw an increase in net sales of 5%, 4%, and 3%, respectively. Meanwhile, sales in the Beauty and Grooming divisions fell by 1% and 3%, respectively.

Besides Beauty, the company’s business areas have recorded increased organic sales. Grooming saw an increase in organic sales of 3%, Fabric & Home Care, Health Care, and Baby, Feminine & Family Care saw increases of 9%. The Beauty segment’s organic sales were unchanged from the previous year.

Margins

The gross margin decreased by 370 basis points (bps) to 44.6 percent in the reported quarter. The gross margin was decreased by 0.4 percent by unfavorable exchange rates. The gross margin in currency-neutral terms decreased by 330 to 45%.

Financials

At the end of its fiscal year 2022, Procter & Gamble had $46,854 million in total shareholders’ equity, $7,214 million in cash and cash equivalents, and $22,848 million in long-term debt.

Fiscal 2023 Guidance

The management has provided a positive outlook for fiscal 2023. The company expects all-in sales to increase by 2% over the previous year. In fiscal 2023, organic sales are anticipated to rise by 3.5 percent. Changes in exchange rates are predicted to hurt all-in sales growth of 3%.

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