Containers of tide detergent on the shelves of a grocery store in New York.
Richard B. Levine | Corbis | Getty Images
Procter & Gamble beat analysts’ estimates for quarterly earnings and sales on Tuesday as consumers maintained pandemic buying trends like buying more detergents and restarting beauty product purchases.
The company, whose portfolio includes Tide laundry detergents, Charmin toilet paper and Pampers diapers, also announced that it will raise prices on some products this fall.
The company’s shares remained unchanged in premarket trading.
The company reported, relative to Wall Street expectations based on an analyst survey by Refinitiv:
- Earnings per share: $ 1.26 versus $ 1.19 expected
- Revenue: $ 18.1 billion versus $ 17.9 billion expected
For the third quarter ended March 31, net income rose to $ 3.27 billion, or $ 1.26 per share, from $ 2.92 billion, or $ 1.12 per share, a year ago. Analysts polled by Refinitiv expected earnings per share of $ 1.19.
Net sales rose 5% to $ 18.1 billion, beating expectations of $ 17.9 billion. Organic sales increased 4% for the quarter.
The company’s fabric and home care segment, which includes Comet’s cleaning products, saw organic sales growth of 7% year over year when many North American consumers stocked detergents.
P & G’s Beauty segment also recorded organic sales growth of 7%. Consumers have started buying skin care products again, such as the premium brand SK-II, and Chinese customers led growth in hair care products.
In Healthcare, organic sales increased 3% for the quarter. The growth was driven by the segment’s oral care products, which include Oral B toothbrushes, while cold and flu products lagged. Social distancing measures led to a weaker flu season this year.
The company’s grooming segment, which includes Gillette and Venus, saw organic sales growth of 4%. Organic shaving sales increased by more than 20%. However, men are still growing their pandemic beards and buying fewer blades and razors than women.
Baby, women’s and family care was the only segment with declining organic sales. The company said fewer consumers bought its baby care products like Pampers diapers due to competition and retail inventory. The segment faced tough comparisons compared to the previous year.
The company reiterated its fiscal 2021 outlook, forecasting revenue growth of 5% to 6% and adjusted earnings growth of 8% to 10%.
P&G has started raising prices for its baby care, feminine care and adult incontinence products in the United States to offset rising raw material costs. Price increases vary by brand, but range from mid to high single digits. Consumers can expect the price increases to take effect in September. Rival Kimberly-Clark, which makes Huggies, has already announced price increases on some of its products.