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P&G Cuts Annual Profit Forecast On Slowing Price Hikes, Gillette Business Writedown

By Reuters
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P&G Cuts Annual Profit Forecast On Slowing Price Hikes, Gillette Business Writedown

Procter & Gamble cut its annual profit forecast as the boost from earlier price hikes fades and on writing down the value of its Gillette business in December.

P&G now expects fiscal 2024 earnings to range from a fall of 1% to in line with fiscal 2023 earnings per share, compared with its prior forecast of a 6% to 9% growth.

The company's quarterly net sales rose to $21.44 billion (€19.7 billion) from $20.77 billion (€19.1 billion) a year earlier. Analysts had expected $21.48 billion (€19.8 billion), according to LSEG data.

In December, P&G said it would record a $1.3 billion (€1.2 billion) charge related to a drop in the book value of its Gillette business as volume growth slowed due to the hybrid post-pandemic work culture and a stronger dollar.

The company estimated it would record up to $2.5 billion (€2.3 billion) in charges over two fiscal years due to the Gillette business write down and restructuring of certain markets.

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'Integrated Strategy'

Jon Moeller, chairperson of the board, president and chief executive officer stated, “We remain committed to our integrated strategy of a focused product portfolio of daily use categories where performance drives brand choice, superiority — across product performance, packaging, brand communication, retail execution and consumer and customer value — productivity, constructive disruption and an agile and accountable organisation.

“The P&G team’s execution of this strategy has enabled us to build and sustain strong momentum. We have confidence this remains the right strategy to deliver balanced growth and value creation.”

Divisional Performance

The company's beauty business saw organic sales growth of 1% during the quarter, while the grooming segment saw sales up 9%.

The healthcare division registered organic sales growth of 2% year on year, with oral care seeing mid-single-digit growth and personal healthcare sales seeing a low-single-digit decline.

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In the fabric and home care segment, organic sales increased 6% year on year in this period, while the baby, feminine and family care division also reported an increase of 3%.

News by Reuters, additional reporting by ESM.

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