Procter & Gamble with Strong Earnings But Weak 2024 Outlook 💡

Procter & Gamble (PG.US) shares are up 2.3% after company reported fourth-quarter earnings and revenue that surpassed analysts' expectations, boosted by product price increases. Company has increased its product prices in response to pressure on spending, a decision that has drawn criticism for prioritizing profit over customer needs. However, company executives have defended the move, stating that they have not experienced any substantial relief in their own input costs. Between April and June, the company's prices rose by 7%. This strategic move has pushed net sales to $20.6 billion and offset a 1% decrease in shipment volumes and significant cost pressures.

Despite these positive results, P&G released a weak outlook for its fiscal 2024 sales, projecting revenue growth of 3% to 4%, below Wall Street's expectations of 4.5% sales growth. The company also expects its earnings per share to grow between 6% to 9%, which is at the lower end of analysts' forecast of 8.8%.

Q4 2023 Results:

• Net Sales: Increased by 5% to $20.6 billion.
• Organic Sales: Increased by 8%.
• Diluted and Core EPS: Increased by 13% to $1.37.
• Operating cash flow was $5.3 billion and net earnings were $3.4 billion, with adjusted free cash flow productivity of 136%.

Fiscal Year 2023 Results:

• Net Sales: Increased by 2% to $82.0 billion.
• Organic Sales: Increased by 7%.
• Diluted and Core EPS: Increased by 2% to $5.90.
• Operating cash flow was $16.8 billion and net earnings were $14.7 billion. Adjusted free cash flow productivity was 95%.

Business Segment Performance:

• Beauty segment organic sales increased 11%
• Grooming segment organic sales increased 8%
• Health Care segment organic sales increased 5%
• Fabric and Home Care segment organic sales increased 8%
• Baby, Feminine and Family Care segment organic sales increased 9%

Procter & Gamble (PG.US), D1 interval, source xStation 5