Shares of Procter & Gamble (NYSE:PG) climbed today after the household products giant delivered strong results in its second-quarter earnings report and raised its full-year earnings outlook, the latest sign that recent moves to drive growth are paying off. As a result, the stock was up 4.7% as of 11:14 a.m. EST, after having gained as much as 6.6% earlier in the morning.
P&G delivered organic sales growth in four out of its five business segments as overall organic sales (which excludes the impact of acquisitions, divestitures, and currency exchange) rose 4%, an impressive growth rate that the company has now reported for the second quarter in a row. A price hike of 1% also boosted organic sales.
Its beauty business was particularly strong, up 8%, boosted by innovations in skin care and personal care brands like SK-II and Olay. The Gillette parent continued to struggle in grooming, however, where organic sales fell 3%, as it faces competition from upstarts like Dollar Shave Club and Harry's. Fabric care was also a bright spot, with sales up by high single digits.
Overall revenue was up slightly to $17.43 billion, topping estimates of $17.15 billion, and adjusted earnings per share increased 5% to $1.25 with the help of a lower tax rate, beating expectations of $1.21. Adjusting for currency exchange, EPS was up 13% to $1.34.
CEO David Taylor summed up the quarter by saying, "Our focus on superiority, productivity, and improving P&G's organization and culture is delivering improved results despite a challenging competitive and macroeconomic environment."
The Tide parent also raised its full-year guidance, lifting the organic sales forecast from between 2% and 3% to between 2% and 4%, and maintained core EPS guidance of 3% to 8%. While the company continues to face challenges on the costs of the income statement as gross margin fell 100 basis points and operating income fell slightly, its organic sales growth shows the company is moving in the right direction.