In its Fridays earnings release, Procter & Gamble (PG) revealed that as commodities prices have fallen, with oil prices down and supply-chain bottlenecks easing following the pandemic, the company is now set to enjoy a $400 million tailwind over the next 12 months.
In an interview with Yahoo Finance, P&G CEO Jon Moeller said, “The US inflation picture is moderating some.”
He did note, inflation is still “significant” in Europe, however.
In the US, as inflation has eased, P&G has had a better than expected fiscal fourth quarter due to the continued benefits from higher prices. Over the quarter, sales and profits grew in all segments of the company.
More importantly, all segments showed profits growing faster than sales.
P&G stock was up more than 3% in early trading Friday, closing up at 2.93%.
The report showed, net sales came in at $20.6 billion vs. an estimate of $20.06 billion. Organic sales growth was 8% vs. a 5.97% estimate. Beauty Segment organic revenue growth was 11% vs. the 6.91% estimate. Grooming Segment organic revenue growth came in at 8% vs. a 7.58% estimate. Healthcare Segment organic revenue growth was 5% vs. the estimate of 7.05%. Fabric & Home Care Segment organic revenue growth was 8% vs. a 6.48% estimate. Baby, Feminine & Family Care Segment organic revenue growth was 9% vs. a 4.29% estimate. Operating profits came in at $4.2 billion vs. an estimate of $4.21 billion. Adjusted EPS were $1.37 vs. an estimate of $1.32.
Fiscal year profit outlook came in at a range of $6.25 to $6.43 as Wall Street analysts expected $6.38. Gross profit margins were up 48.4% from 44.6% one year ago.
Mark Astrachan, of Stifel Insitutional said, “Overall we view the result as solid and reflective of top-line momentum and reinvestment positioning the company to accelerate organic volume growth as the contribution to sales from pricing lessens. We anticipate F2024 consensus will be largely unchanged, with PG shares up modestly on stronger sales growth and a view that initial guidance is somewhat conservative.”
