NEW YORK (AP) – Procter & Gamble Co, the maker of such iconic household products as Crest toothpaste, Tide detergent and Charmin toilet paper, raised its annual sales outlook on Friday, after turning in better-than expected fiscal third-quarter earnings results as a series of price hikes boosted its performance.
The earnings results offer encouraging signs about the resiliency of the consumer ahead of reports next month from major retailers like Walmart and Target in an increasingly challenging economy.
P&G executives told analysts during its earning call on Friday that the United States consumer is “holding up well” and its share of private label brands, which tend to be less expensive, is stable at 16 per cent, a good indication that it’s not seeing shoppers materially trade down.
The Cincinnati-based retailer reported fiscal third-quarter profits of USD3.4 billion, or USD1.37 per share, for the period ended March 31. That compares with USD3.35 billion, or USD1.33 per share, for the year-ago period.
The results topped Wall Street expectations. The average estimate of nine analysts surveyed by Zacks Investment Research was for earnings of USD1.32 per share.
P&G increased prices by about 10 per cent across its various brands in the latest quarter from a year ago, matching the previous quarter’s price hikes. In the latest quarter, the prices of fabric and home care went up 13 per cent and grooming products rose 10 per cent.
Meanwhile, the number of products it sells globally fell three per cent during the fiscal third quarter, but that was an improvement from the six per cent drop in the previous quarter.
The world’s largest consumer products maker posted a four per cent jump in revenue to USD20.07 billion in the period, which also topped Street forecasts. Eight analysts surveyed by Zacks expected USD19.3 billion. A year ago, sales reached USD19.4 billion.
The company said that it expects overall sales for the current year to increase roughly one per cent compared with the prior year. It had previously expected sales to be anywhere from down one per cent to unchanged. It also maintained its annual profit outlook.
P&G shares rose nearly four per cent or USD5.72 to USD156.57 in morning trading on Friday.
