A financially stretched US consumer continues to power mixed earnings results at P&G.
Proctor & Gamble (PG) shares fell 1.5% in pre-market trading on Thursday as the company’s second fiscal quarter sales missed estimates in the grooming, fabric care, and baby categories as consumers traded down to cheaper private label options.
P&G did beat earnings estimates and maintain its full year outlook.
“We are seeing sales growth in our categories in the US and Europe, albeit at a slower pace,” Proctor & Gamble CFO Andre Schulten told Yahoo Finance.
“The consumer is choosing to be a little bit more diligent in terms of using pantry inventory, maybe dosing the product a little bit more carefully, maybe making choices in terms of how frequently they use. None of this is untypical. None of this will sustain. So we firmly believe the category over time will return to three to 4% growth,” Schulten said.
The Street has braced for softer results from P&G, with the stock down about 6% in the past six months.
“The K-shaped economy powers trade-down in basics but trade-up within the more discretionary Beauty sub-sector,” said Evercore analyst Robert Ottenstein on the headwinds consumer products companies are currently experiencing.
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Net sales: $22.2 billion, +1% from the prior year vs. $22.32 billion estimate
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Organic sales growth: Unchanged vs. +0.54% estimate
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Beauty segment organic revenue growth: +4% vs. +2.87% estimate
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Grooming segment organic revenue growth: 0% vs. +2.42% estimate
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Healthcare segment organic revenue growth: +3% vs. +1.73% estimate
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Fabric and home care segment organic revenue growth: 0% vs. +1.2% estimate
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Baby, feminine, and family care segment organic revenue growth: -4% vs. -3.2% estimate
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Gross margin: 51.2% vs. 52.2% estimate
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Adjusted EPS: $1.88, unchanged from the prior year vs. $1.86 estimate
Brian Sozzi is Yahoo Finance’s Executive Editor and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
