What happened
Shares of Procter & Gamble (PG +2.46%) were gaining today after the household products giant delivered a strong fiscal fourth-quarter earnings report, successfully passing along price increases and beating estimates on the top and bottom lines.
As of 10:48 a.m. ET, the stock is up 3.2%.
NYSE: PG
Key Data Points
So what
Overall revenue rose 5% to $20.6 billion, beating estimates at $20 billion, with organic sales up 8%, which strips out the effect of acquisitions, divestitures, and currency exchange.
Price increases drove most of the sales improvement, as prices rose 7% while organic volume was down 1%.
The company also showed strong improvements in margin due to price increases, productivity improvements, and a stabilization in input costs as commodity costs have normalized.
Gross margin jumped 380 basis points in the quarter, which included 340 basis points of pricing benefit and 290 basis points from productivity savings. SG&A expenses rose 190 basis points as the company increased spending on marketing and overhead investments.
On the bottom line, earnings per share increased 13% to $1.37, topping the consensus at $1.32, and EPS was up by 22% on currency-neutral terms.
CEO Jon Moeller said, "The April-June quarter provided a very strong finish to fiscal year 2023 -- top-line growth, bottom-line growth, and cash generation."
Now what
Looking ahead, the company offered solid guidance for fiscal 2024, forecasting revenue growth of 3% to 4%, or 4%-5% organic and revenue growth, and it expects earnings per share of $6.25 to $6.43, up 6% to 9% from the year just ended. That was slightly below the analyst consensus at $6.38.
While the decline in organic volume isn't a good sign, the overall results were strong, and the company's ability to pass along price increases shows P&G is about as reliable a safe stock as there is.
