Procter & Gamble (P&G) announced an impressive Q3 performance with a stronger-than-expected earnings report, despite falling short in revenue predictions. The multinational consumer goods corporation recorded adjusted net income of $3.76 billion and earnings per share (EPS) of $1.52 - an approximate growth of 11% year-over-year, outpacing analysts' estimates.
However, with only a 1% year-on-year increase in revenue - totaling $20.2 billion, the company missed its forecast, pushing shares down by 1% in pre-market trading. The slower-than-expected price hikes of approximately 3% (merely above the projected 2.75%) are believed to have played a role in the revenue shortfall, marking the smallest increase since Q2 of 2022.
Despite the marginal price hike, robust organic sales were reported in all segments except for Baby and Feminine Care. Furthermore, P&G revised its annual outlook, inflating EPS expectations to a rise of 1% to 2% above the previous fiscal year's benchmark of $5.90 - a substantial shift from the initial projection of a 1% decline to flat.
The company maintained its net sales guidance, anticipating a growth of 2% to 4% compared to the last fiscal year. The Fabric and Home Care segment, including popular brands like Tide, Gain, and Dawn dish soap, was the top revenue contributor making up 35% of net sales in FY 2023. The Baby and Feminine Care segment trailed as the second-largest sector, with Pampers and Tampax contributing significantly.
As a result of the less-than-stellar revenue performance, P&G's shares took a slight hit, decreasing about 1.3% in pre-market trading. Despite this, stock has appreciated approximately 6% in 2023 to date.