Procter & Gamble (PG 0.45%) isn't growing at a double-digit rate anymore, but the business is still among the most stable on the market. The consumer-staples giant said in a recent earnings update that sales expanded at a solid clip through late June despite soaring inflation and slowing economic growth.

P&G did face increasing pressure on its profits, and demand slowed in a few key niches. But there were some positive surprises in the earnings announcement, too.

Sales are up

Procter & Gamble's sales trends continued to demonstrate why investors have been attracted to its stock at a volatile time for most companies' growth rates. P&G's organic sales were up a solid 7% on top of big gains a year ago.

It wasn't all good news, though. P&G's sales volumes turned negative, dipping 1% overall. The company also received no benefit from a tilt toward more premium products in the portfolio. Both of those trends worsened compared to the previous quarter. P&G also grew slightly slower than peer Kimberly Clark which earlier in the week announced a 9% organic sales increase.

Still, P&G was able to significantly boost the top line yet again, thanks to an 8% increase in average prices. "Fiscal 2022 was another strong year,"  CEO Jon Moeller said in a press release.

Accelerating cost spikes

As usual, P&G did a good job navigating through increasing cost pressures. Gross profit fell due to higher costs on inputs, freight, and transportation. But savings in other parts of the business allowed operating margin to hold steady. Core earnings rose 5% after accounting for currency exchange rate shifts and rose by 12% for the full fiscal 2022 year.

Cash flow trends remained strong, landing at $16.7 billion for the full year. That success allowed P&G to invest in the business while still returning tons of cash to shareholders. The company spent $19 billion on cash returns, including $9 billion on dividend payments

Looking ahead

That dividend is almost sure to increase again in 2023, but P&G signaled slower growth in a few areas as compared to fiscal 2022. Total cash returns should land between $15 billion and $18 billion, for example, and organic sales gains will slow to between 3% and 5%. Earnings will be hit hard by currency exchange rate pressures and rising commodity and freight costs. Executives estimate that these challenges will reduce earnings by about $3.3 billion, or 23 percentage points. 

The pressures will probably start to ease in the second half of the fiscal year, according to management. But P&G is still projecting slower growth and much weaker earnings in 2023 overall, as compared to the past two years.

The company has surpassed its initial outlook in each of the last two years, and shareholders are hoping that this forecast represents another conservative initial reading that might increase as the year progresses.

That prospect of steady growth, plus the promise of more cash returns from dividends and stock buybacks, should have investors feeling good about P&G stock despite the sluggish outlook for fiscal 2023. Simply holding shares will likely deliver solid long term returns.