Quarter Four 2023 Report for Procter & Gamble (PG)

Procter & Gamble






announced better than expected quarterly earnings and revenue on Friday. The positive results were driven by price increases for products like Crest toothpaste and Pampers diapers.

However, the company’s outlook for fiscal 2024 sales did not meet Wall Street estimates.

Despite the lower sales forecast, P&G’s stock rose more than 2%.

Here are the key results compared to analysts’ expectations:

• Earnings per share: $1.37 vs. $1.32 expected
• Revenue: $20.55 billion vs. $19.98 billion expected

P&G reported a net income of $3.38 billion, or $1.37 per share, for the fiscal fourth quarter, compared to $3.05 billion, or $1.21 per share, in the previous year.

Net sales increased 5% to $20.55 billion, with organic revenue growing 8% in the quarter, excluding the impact of foreign currency, acquisitions, and divestitures.

Looking ahead, P&G expects its revenue to grow 3% to 4% in fiscal 2024, below Wall Street’s forecast of 4.5% sales growth. The company also projects a 6% to 9% earnings per share growth, on the lower end of analysts’ expectations of 8.8%.

“While entering fiscal 2024 with more stable supply chains and input costs, we anticipate increased volatility. The challenges we face are multi-faceted,” said CFO Andre Schulten during the conference call.

One positive aspect is a $400 million after-tax benefit from favorable commodity costs, including currency tailwinds.

P&G has implemented price increases on its products over the past two years to offset higher commodity costs. However, customer loyalty towards P&G’s brands has weakened, leading to five consecutive quarters of volume declines. In the quarter, P&G’s volume decreased by 1%. For fiscal 2024, the company expects volume to start growing again, with prices rising by only 1% to 1.5%.

In the United States, P&G’s largest market, consumers have shifted to cheaper private-label products, resulting in a 3% growth in market volume during the quarter. However, demand was weaker in Europe and Asia Pacific.

The company’s health-care segment experienced a 3% drop in global volume, with higher prices deterring North American customers. Europe and Asia-Pacific also saw contractions in the market.

P&G’s fabric and home-care business, which includes Tide and Febreze, witnessed a 2% decline in volume. The company attributes this to reduced purchases of fabric-care products like Downy detergent in China.

The grooming segment, encompassing Gillette and Venus razors, reported a 1% decrease in volume for the quarter.

P&G’s baby, feminine and family care, and beauty segments maintained flat volume for the quarter.