P&G sees mixed results as elevated prices boost earnings

Procter & Gamble, the maker of brands like Tide, Head & Shoulders, and Crest toothpaste, reported an uptick in sales on the back of price increases in its third quarter, while its performances across categories varied.

Net sales were up 1% year over year to $20.2 billion, falling below analysts’ expectations, though organic sales rose 3%. While the company saw stagnant volume overall, in North America its volume rose 3%, in line with a trend of volume increases over the past several quarters, CFO Andre Schulten noted on the earnings call.

Pricing was up 3% year over year, though Schulten said the company didn’t implement any price increases in the US in the quarter, CNBC reported.

P&G’s beauty, healthcare, and fabric and home care categories all saw net sales boosts of 2%, largely driven by higher prices. Within beauty, skin and personal care organic sales were down, though buoyed by “volume growth from innovation in personal care,” according to an earnings release, while haircare organic sales rose, thanks to elevated prices. In healthcare, oral care and personal healthcare, which houses brands like Vicks, saw higher sales but volume dips, which P&G said was due to lower demand for cough and cold products.

Net sales for baby, feminine, and family care, meanwhile, dipped 2% amid a decline in volume. P&G attributed this to higher prices for its baby care products, which include Luvs and Pampers diapers, and feminine care, including brands like Tampax and Always. Schulten said the company has an opportunity in this category, particularly in baby care, to push out more innovation for its mid-tier brands like Luvs.

“That’s what the team really is focused on, to reestablish superiority on those few businesses where we feel that we let value get a little bit out of sync with what the consumer needs,” Schulten said.

P&G maintained its guidance for annual organic sales growth of 4% to 5%, while it increased its outlook for expected earnings.

“We expect the environment around us to continue to be volatile and challenging, from input costs to currencies, to consumer, retailer, and geopolitical dynamics,” Schulten said. “However, our strong results year to date enable us to raise or maintain key guidance metrics for the year.”