There's a new normal for Procter & Gamble (PG 1.19%) shareholders. After watching their company struggle for years with a massive turnaround effort that failed to deliver improved results, the maker of Tide detergent and Pampers diapers is finally on a different path. Last week, P&G raised its sales outlook following another blockbuster quarter highlighted by market share gains and sparkling financial returns.

In a conference call with Wall Street analysts, CFO Jon Moeller broke down the latest results and explained why the management team expects the positive momentum to continue at least through the second half of fiscal 2020. Below are a few highlights from that presentation.

A woman shops for cleaning supplies.

Image source: Getty Images.

Global wins

Moeller said: "We faced market-level challenges in an increasing number of markets: India, the U.K., Australia, Turkey, Iraq, Nigeria, Kenya, Lebanon, Argentina, Chile, Mexico and the Hong Kong market. Through all of this, we grew organic sales 5% in the quarter and 6% over the first half [of fiscal 2020]."

Executives noted two major areas of demand weakness this quarter with the Gillette shaving business and the Pampers diapers franchise each underperforming. Yet the broader picture was one of strong growth that shines through in a few data points. P&G noted positive organic sales in nine of its ten major product categories and market-beating growth in its two core geographies, the U.S. and China.

Volume is leading the way higher, too, as organic sales rose 6% through calendar 2019 compared to 4% for rival Kimberly Clark. "Yet another strong quarter," Moeller explained, "[with] solid volume, sales, and market share trends across both [product] categories and geographies."

Still gaining efficiency

"Fiscal year-to-date core earnings per share are up 18%; up 19% on a constant currency basis," Moeller said.

P&G is almost six years into its cost-cutting and restructuring initiative, but management is still finding room to add efficiency to the business. Rising prices and reduced manufacturing and supply chain spending helped push gross profit margin up by two full percentage points this quarter, and that success flowed right down to the bottom line.

As a result, the consumer giant's core adjusted earnings jumped 19%. Kimberly Clark, in contrast, is expanding its profits at a 4% pace these days.

Raising its outlook again

Moeller said: "We're again increasing our fiscal year outlook for organic sales growth, for core earnings-per-share growth, and for free cash flow productivity as well as cash return."

Shareholders went years without seeing an outlook upgrade from P&G, but they've now been treated to two such surprises back to back. The company entered fiscal 2020 projecting growth of 3.5% at the midpoint of guidance before boosting that forecast to 4% last quarter and raising it most recently to 4.5%.

CEO David Taylor and his team also raised their earnings prediction and their cash flow target. That latter metric is especially important, because it supports increasing cash returns to investors. And sure enough, P&G is now expecting to spend roughly $500 million more on stock repurchases this fiscal year.

The second half of fiscal 2020 will have bigger challenges, including a tough comparison with booming prior-year demand. Competitors are also stepping up their market share advances, including with aggressive price cuts. These moves should contribute to slower growth over the next six months than the 6% rate that shareholders saw over the past six months. Still, the company's firm expansion pace and its rising margins will likely power double-digit earnings growth in 2020 and a robust increase to P&G's dividend by early spring.