Procter & Gamble (P&G) sees lackluster sales increase in latest earnings, but sweetens the deal with EPS

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on Apr 19, 2024
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  • Procter & Gamble today announced its Q3 financial results for the 2023/2024 financial year.
  • Unhindered by the Gillette settlement as it was before, the company raised earnings per share extravagantly.
  • However, little else brought investors joy, with disappointing net sales and volumes.

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Procter & Gamble (NYSE:PG) announced their 2024 third quarter results today on April 19th.

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The company managed a marginal increase in its net sales – a 1% increase of $20.2 billion. Nevertheless, this was slightly behind expectations.

Net sales for Q3 of 2024 stood at $20.2 billion, compared with Q3 2023’s $20.1 billion.

This was also significantly less than the previous quarter’s net sales of $21.4 billion in Q2 2024.

Diluted net earnings per share were $1.52, an increase of 11% year-on-year (YoY).

Quarterly change

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In the previous quarter, the company reported second quarter fiscal year 2024 net sales of $21.4 billion, an increase of 3% versus the prior year. Organic sales, which excludes the impacts of foreign exchange and acquisitions and divestitures, increased 4%.

Diluted net earnings per share were $1.40, which in itself was a 12% decrease.

Compared with this, the company had a less stellar quarter in terms of financial performance. However, it managed an increase in EPS, thanks to the lack of the ‘Gillette intangible asset’ which had come out of shareholders’ coffers the previous quarter.

Expectations ahead of earnings

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Before the earnings were announced, P&G had announced in January that it was expecting net sales to grow between 2% and 4% in the 2024 financial year. With this being the third quarter of that year,  

Analysts expected an EPS of $1.42 per share prior to the earnings, a rise of 3.7% YoY.

Revenues were expected to be up marginally, by about 2% YoY, or approximately $20 billion.

As a result of these, more optimistic figures, most analysts expected less P&G price hikes to their products reported this quarter – or, at least, less aggressive ones.

Pricing

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It seems analysts’ expectations here were answered – if only just.

Organic sales, which exclude the impacts of foreign exchange and acquisitions and divestitures, increased three percent. The organic sales increase was driven by a three percent increase from higher pricing. Mix and volume had a neutral impact on sales for the quarter.

This compared favorably to Q2, when the organic sales increase was driven by a 4% increase from higher pricing, partially offset by a one percent decrease in organic shipment volumes. 

Dividend

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Earlier this month, P&G also declared an increased quarterly dividend of $1.0065 per share, payable on May 15th to all who are shareholders as of today.

This keeps the company’s status as a ‘dividend aristocrat’ intact, as it marks the 68th year in a row that P&G has both paid and increased its dividend.

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