The Procter & Gamble Company (NYSE: PG) has reported its fiscal year 2024 third-quarter results, showcasing modest growth amidst challenging market conditions. The company’s net sales slightly increased by 1% to $20.2 billion compared to the previous year. In contrast, organic sales, excluding the impacts of foreign exchange, acquisitions, and divestitures, grew by 3%. The diluted net earnings per share (EPS) experienced a notable rise of 11%, reaching $1.52.
This growth in EPS is attributed to both the increase in net sales and an improvement in core operating margin. Additionally, P&G maintained strong cash flow management, with operating cash flow reaching $4.1 billion and net earnings totaling $3.8 billion for the quarter. The company continued its tradition of shareholder returns, distributing approximately $3.3 billion through dividends and share repurchases.
P&G’s performance this quarter reflects its resilient business model and strategic focus on key categories of daily-use products where brand choice is driven by performance.
The company’s Chairman of the Board, President, and Chief Executive Officer, Jon Moeller, highlighted the solid sales and strong earnings growth despite multiple headwinds. P&G’s commitment to an integrated strategy focusing on product superiority, productivity, constructive disruption, and an agile and accountable organization has enabled it to navigate challenging times effectively.
The company’s investments in superiority across product performance, packaging, brand communication, retail execution, and consumer and customer value are aimed at driving market growth and sustaining momentum.
P&G Beats EPS Expectations in Fiscal Q3 with $1.52, Misses on Revenue
Comparing the current performance against expectations, P&G has exceeded the anticipated EPS of $1.41 and is closely aligned with the revenue expectation of $20.44 billion, reporting $20.2 billion in net sales.
This outperformance in EPS by $0.11 or approximately 7.8% over expectations underscores the company’s operational efficiency and ability to manage costs effectively. The slight miss in revenue expectations can be attributed to the challenging macroeconomic environment and headwinds from foreign exchange fluctuations.
However, the 3% growth in organic sales indicates a strong underlying business dynamic, driven primarily by a 3% increase from higher pricing, with volume and mix having a neutral impact on sales for the quarter.
P&G Expects All-In Sales Growth in the Range of 2% to 4% for the Year
Looking ahead, P&G maintains its fiscal 2024 guidance, expecting all-in sales growth in the range of 2% to 4% versus the prior year, with organic sales growth projected to be between 4% to 5%. The company has raised its fiscal 2024 diluted net earnings per share growth forecast from a range of -1% to inline, to a range of 1% to 2% versus fiscal 2023 EPS of $5.90.
Furthermore, P&G anticipates core net earnings per share growth to be in the range of 10% to 11%. The company also expects to face headwinds from unfavorable foreign exchange rates and interest expenses but sees a potential benefit from favorable commodity costs. P&G continues to focus on delivering shareholder value, with plans to pay over $9 billion in dividends and repurchase $5 to $6 billion of common shares in fiscal 2024.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
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