Procter & Gamble quarterly profit climbs to US$3.2b on pandemic buying

Business | 20 Apr 2021 8:00 pm

Procter & Gamble on Tuesday topped analysts’ estimates for quarterly earnings and revenue as consumers maintained pandemic buying trends like purchasing more cleaning supplies and started buying beauty products again, CNBC reports.

The company, whose portfolio includes Tide detergent, Charmin toilet paper and Pampers diapers, also announced that it would implement price increases on some products this autumn.

Shares of the company were flat in premarket trading.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

Earnings per share: US$1.26 versus US$1.19 expected

Revenue: US$18.1 billion versus US$17.9 billion expected

For the third quarter ended March 31, net income increased to US$3.27 billion, or US$1.26 per share, up from US$2.92 billion, or US$1.12 per share, a year earlier. Analysts surveyed by Refinitiv were expecting earnings per share of US$1.19.

Net sales grew by 5 percent to US$18.1 billion, beating expectations of US$17.9 billion. Organic revenue grew by 4 percent in the quarter.

The company’s fabric and home care segment, which includes Comet cleaning products, reported organic sales growth of 7 percent compared with the same time a year ago, when many North American consumers were stockpiling cleaning supplies.

P&G’s beauty segment also reported organic revenue growth of 7 percent. Consumers have started buying skincare products, like its premium SK-II brand, again, and Chinese customers led growth in hair care products.

In the health care business, organic sales grew by 3 percent in the quarter. The growth came from the segment’s oral care products, which include Oral B toothbrushes, while its cold and flu products lagged. Social-distancing measures resulted in a weaker flu season this year.

The company’s grooming segment, which includes Gillette and Venus, reported organic sales growth of 4 percent. Organic sales of shaving appliances increased by more than 20 percent. Men, however, are still growing out their pandemic beards and bought fewer blades and razors than women.

Baby, feminine and family care was the only segment with declining organic sales. The company said that fewer consumers bought its baby care products, like Pampers diapers, due to competition and retailer inventory. The segment faced tough comparisons from a year ago.

The company reiterated its fiscal 2021 outlook, forecasting sales growth of 5 percent to 6 percent and adjusted earnings growth of 8 percent to 10 percent.

P&G has started implementing price hikes across its baby care, feminine care and adult incontinence products in the United States to offset rising commodity costs. Price increases will vary by brand but will be in the range of mid-to-high single digits. Consumers can expect the price increases to go into effect in September. Rival Kimberly-Clark, who makes Huggies, has already announced price hikes on some of its products.

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