What happened 

Shares of Procter & Gamble (PG 0.47%) declined by 6.2% on Friday after the consumer goods giant's profits fell short of investors' expectations. 

So what

P&G's net sales rose 3% year over year to $19.5 billion in its fiscal 2022 fourth quarter, which ended on June 30. The company's organic sales -- which account for the impact of foreign exchange fluctuations, acquisitions, and divestitures -- grew by 7%. These gains were driven by price hikes, which more than offset a 1% decline in volume.

P&G was also able to offset higher commodity costs with a reduction in selling, general, and administrative expenses. Its operating income, in turn, increased by 2% to $3.6 billion.

Meanwhile, share repurchases and a lower effective tax rate helped to drive P&G's earnings per share up by 7%, to $1.21. However, that was a bit below Wall Street's estimates. Analysts had forecast P&G to report per-share earnings of $1.22. 

Now what

Coronavirus-related lockdowns in China and the closure of some of its operations in Russia have dented P&G's sales volumes. The company also expects foreign exchange movements and higher commodity and freight costs to continue to weigh on its profit growth in the coming quarters. Thus, management warned that P&G's sales and earnings per share could both be flat in fiscal 2023, though the upper end of its guidance ranges places those estimates at up 2% and 4%, respectively.

"As we look forward to fiscal 2023, we expect another year of significant headwinds," CEO Jon Moeller said.