P&G reports ‘strong results’ for Q3 despite ‘difficult operating environment’

The Procter & Gamble Company (P&G) has outlined its financial results for Q3 FY23, reporting net sales of 20.1 billion dollars despite the “difficult cost and operating environment”.

The company, which owns the likes of Olay, Head & Shoulders and Herbal Essence, saw a 4 percent increase in its net sales compared to the previous year, in spite of the impact from “unfavourable foreign exchange”.

Its organic sales, which excluded the impacts of foreign exchange, rose 7 percent, while its operating cash flow was 3.9 billion dollars. Its net earnings for the quarter were 3.4 billion dollars, with its adjusted free cash flow productivity at 92 percent.

Its gross margin increased 150 basis points versus a year ago, driven by increased pricing and gross productivity savings.

Its diluted net earnings per share were 1.37 dollars, an increase of 3 percent, and the company said that it returned 3.6 billion dollars of cash to shareholders.

Its increase was largely driven by its health care division, where organic sales increased 9 percent – a figure boosted by increased pricing in personal health care, where sales had increased double digits.

Meanwhile, its fabric & home care division also welcomed a 9 percent increase, while its beauty and grooming both saw 7 percent growth and its baby, feminine and family care rose 6 percent.

P&G raises guidance, faces foreign exchange headwinds

For FY23, the group has raised its guidance, expecting sales to grow approximately 1 percent, up from its prior guidance range of down 1 percent to in-line.

The company also upped its outlook for organic sales growth from 4 to 5 percent to around 6 percent.

Meanwhile, it maintained its outlook for its diluted net earnings per share growth in the range of in-line to up 4 percent.

It further noted that its outlook includes headwinds of approximately 1.3 billion dollars after-tax due to “unfavourable” foreign exchange rates and 2.2 billion dollars due to higher commodity and material costs.

While P&G said its capital spending is now estimated to be around 4 percent of its FY23 net sales, it added that it continues to expect adjusted free cash flow productivity of 90 percent and to pay around 9 billion dollars in dividends.

Speaking on the report, Jon Moeller, chairman of board, president and CEO, said in a release: “We delivered strong results in the third quarter of fiscal year 2023 in what continues to be a very difficult cost and operating environment.

“Our team’s strong execution of our strategies and our progress through three quarters enable us to raise our fiscal year outlook for sales growth and cash return to shareowners and maintain our guidance range for EPS growth despite continued cost and foreign exchange headwinds.

“We remain committed to our integrated strategies of a focused product portfolio of daily use categories where performance drives brand choice, superiority, productivity, constructive disruption and an agile and accountable organisation structure.

“These strategies have enabled us to build and sustain strong momentum, and we’re confident they remain the right strategies to deliver balanced growth and value creation going forward.”