Procter & Gamble Co. (NYSE:PG), known for household products like Crest toothpaste, Tide detergent, and Charmin toilet paper, announced better-than-expected fiscal fourth-quarter results, indicating that consumers are still enthusiastic about their products despite the company’s continued price adjustments.
In the latest quarter, P&G implemented price increases of about 7% across its various brands, which was less than the 10% increase seen in the previous period. Additionally, the number of products sold globally declined by only 1% during the quarter, showing a less significant drop compared to the 3% decrease in the fiscal third quarter and a 6% decrease in the second quarter. These figures indicate that the pullback on price hikes is starting to ease.
The positive report comes as a relief, considering that there have been signs of consumers pushing back against relentless price increases by consumer products and food companies. For instance, Conagra Brands experienced a quick turnaround in demand as smaller price increases failed to boost sales volume in the fourth quarter. In contrast, during the third quarter, more significant price increases (over 15%) did not dampen demand. Similarly, PepsiCo reported that higher prices lifted the company’s revenue in the second quarter, but consumer demand has since weakened. The company expects price increases to moderate in the second half of the year.
Meanwhile, the Federal Reserve’s closely monitored measure of consumer prices fell last month to its lowest level since March 2021, indicating a gradual cooling of inflation in the United States.
P&G’s (NYSE:PG) net income for the quarter ending on June 30 was $3.39 billion, or $1.37 per share, compared to $3.06 billion, or $1.21 per share, in the same period last year. Sales also saw a 5% increase, reaching $20.6 billion compared to $19.51 billion in the previous year’s quarter.
In the fourth quarter, prices of fabric and home care items, as well as health care products, rose by 6%, while grooming products experienced a 9% increase. Beauty items saw an 8% rise.
Looking ahead, P&G expects sales growth for fiscal year 2024 to be in the range of 3% to 4% compared to the previous year. The company anticipates organic sales growth, which excludes deals and currency fluctuations, to be in the range of 4% to 5%.
For the current year, P&G (NYSE:PG) projects net earnings per share growth to be in the range of 6% to 9%, equivalent to a range of $6.25 to $6.43 per share, with a mid-point estimate of $6.34, indicating a 7.5% increase. Analysts were previously expecting $6.37 per share.
In response to the positive results, P&G’s shares rose by nearly 3% in morning trading on Friday.
Featured Image: Freepik
Author Stephanie Bédard-Châteauneuf 
