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Shares of The Procter & Gamble Company (NYSE: PG ) fell on Thursday after announcing earnings results for the second quarter of 2023. Revenue beat expectations while earnings matched estimates. The company also raised its sales outlook for the full year of 2023. The stock has gained 13% over the past three months.
Quarterly performance
Procter & Gamble reported net sales of $20.8 billion in the second quarter of 2023, which was down 1% year over year but ahead of estimates of $20.7 billion. Organic sales grew 5%, driven by higher prices and a positive product mix. Core EPS fell 4% year over year to $1.59 but was in line with expectations.
Trends
On a reported basis, P&G recorded single-digit sales declines in the Beauty, Grooming, and Baby, Feminine & Family Care segments during the second quarter while sales increased in the Health Care and Fabric & Home Care segments by 2% and 1%, respectively.
On an organic basis, sales increased in all segments, driven by higher prices, with the exception of Grooming, which remained flat. The highest growth came from Health Care and Fabric & Home Care which both saw sales increase by 8%. Organic sales gains were offset by volume declines in all segments.
In Beauty, Hair Care sales increased in single digits helped by price, but this was partially offset by a decline in volume due to market contraction. In Healthcare, Oral Care volumes were impacted by portfolio reductions in Russia and pandemic-related disruptions in Greater China. Organic sales in Personal Care increased in the high teens due to price, appropriate mix and volume growth driven by the cough, cold and flu season.
Outlook
P&G raised its sales outlook for fiscal year 2023 and now expects overall sales to decline 1% to be in line with the previous fiscal year. Previous expectations were for a decline of 3% to 1%. Additionally, organic sales will now grow 4-5% YoY compared to the previous range of 3-5%.
The company maintained its full-year EPS growth outlook of 4% compared to last year. Due to significant charges from commodity and materials costs and foreign exchange impacts, EPS may be at the lower end of the guidance range.
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