Procter & Gamble Co's quarterly revenue and profit beat Wall Street expectations on Tuesday, boosted by price hikes and strong demand for its beauty products such as SK-II and Olay.
P&G, like other consumer goods companies, has been raising prices on its products to tackle soaring freight and raw material costs that have dented margins.
Q4 Results
In the fourth quarter, organic sales, a closely watched metric which excludes items like acquisitions, divestitures, and currency effects, rose 7%, its best in at least two years.
Price hikes contributed 3 percentage points to the organic sales growth, the company said.
The company's net sales rose 3.6% to $17.09 billion (€15.33 billion) in the fourth quarter, beating analysts' average estimate of $16.86 billion (€15.12), according to IBES data from Refinitiv.
The Pampers diaper maker reported a net loss attributable to the company of $5.24 billion (€4.7 billion), or $2.12 per share, for the quarter ended 30 June primarily due to non-cash accounting adjustments related to its Gillette Shave Care business. This compares to net income of $1.89 billion (€1.70 billion), or 72 cents per share, a year earlier.
Excluding items, the company earned $1.10 per share, beating the average analyst estimate of $1.05.
Divisional Performance
Organic sales in the beauty business rose 8%, boosted by demand for its super-premium SK-II brand and Olay skincare products.
In the fabric and home care unit, the company's biggest business that sells Tide and Febreze air fresheners, organic sales climbed 10%.
'Our Strongest Quarter'
Commenting on the performance, chairman, president, and chief executive of P&G, David Taylor, said, “We met or exceeded each of our going-in core targets for sales, profit and cash in fiscal 2019.
"We built sales, market share and profit margin momentum throughout the year, ending with our strongest quarter of organic sales growth in well over a decade," he added.
Full-Year Results
The FMCG giant reported a 1% increase in net sales to $67.7 billion (€60.73 billion) for the full fiscal year ended 30 June.
Organic sales increased 5%, excluding the impact of foreign exchange, acquisitions, and divestitures.
Net earnings attributable to the company amounted to $3.9 billion (€3.5 billion) for the full year 2019.
Outlook
"Looking ahead, we will continue to focus on superiority, productivity, constructive disruption and improving P&G’s organisation and culture to deliver sustainable, balanced top-line and bottom-line growth along with strong cash generation in a challenging competitive and macroeconomic environment," Taylor said.
News by Reuters, additional reporting by Dayeeta Das. Click subscribe to sign up to ESM: European Supermarket Magazine.
