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Price hikes helped Procter & Gamble, maker of Dawn dish soap, Gillette razors, and haircare brands like Head & Shoulders and Pantene, deliver revenue growth in its fiscal second quarter as consumers showed some signs of accepting higher prices, particularly in North America.
P&G reported its net sales rose 3% YoY to $21.4 billion, with organic sales up 4% thanks to higher pricing. Volume was flat overall, but rose 4% in North America.
“As consumers come in, maybe at a lower tier and a lower value proposition, they continue to trade up in the US, which speaks to the health of the proposition but also the health of the consumer and willingness to invest,” CFO Andre Schulten said during the earnings call.
Each of P&G’s segments posted net sales growth despite volume declines in healthcare and in baby, feminine, and family care, though volume picked up for grooming.
The company’s beauty segment saw a 1% sales uptick; hair care performed well, while skin and personal care saw a mid-single-digit sales drop. Grooming, which includes Gillette, saw the highest sales growth (6%). Oral care, which includes brands like Crest and Scope, helped boost the healthcare segment, which grew 4%, while the baby, feminine, and family care segment also saw a sales uptick thanks to a mid-single-digit boost for feminine care, home to Always and Tampax.
Other CPG giants playing within the beauty, personal care, and healthcare categories, including Colgate-Palmolive, Unilever, and Clorox, are set to release earnings results in the coming weeks.
P&G maintained its organic sales forecast of 4% to 5% growth, but predicted its fiscal 2024 earnings would be flat or fall by 1%, after originally projecting earnings per share to rise 6% to 9%. The shift is a result of its previously announced move to write down the value of Gillette, which it acquired in 2005, taking a charge of $1.3 billion.