Procter & Gamble Posts Biggest U.S. Sales Gain in Decades
April 17 2020 - 7:29AM
Dow Jones News
By Sharon Terlep
Consumer-products giant Procter & Gamble Co. reported its
biggest U.S. sales increase in decades as Americans stocked up on
household mainstays from laundry detergent to cough medicine as the
coronavirus pandemic spread across the country.
Increased demand in P&G's home market more than offset steep
declines in China, its second-largest market, where closed
factories, roads and stores stymied production and kept consumers
from buying.
P&G is the first big maker of household staples to report
financial results for the start of 2020, when the pandemic ravaged
China and spread in earnest through the U.S.
P&G said organic sales, a measure that excludes currency
moves and deals, rose 6% for the quarter. Sales rose 10% in the
U.S. and fell 8% in China, a far less severe decline than the
company said it expected.
The results "are a direct reflection of the integral role our
products play in meeting the daily health, hygiene and cleaning
needs of consumers around the world," CEO David Taylor said.
The strongest growth was in P&G's health-care unit, which
includes Vicks cold medicine, and its fabric and home care
division. Sales rose 9% and 10%, respectively, in those units.
Shoppers rushed to stock up, and that drove a chunk of the
increase, P&G said. But the company expects some trends to
remain for the longer term as Americans spend more time at home and
place a greater priority on cleaning.
In Asia, P&G's high-end SK-II skin-care brand was stung both
by shutdowns in the region and a sharp falloff in spending at
airport shops, a major sales driver for the highly profitable
brand. P&G's beauty unit, which has been among the company's
fastest growing in recent quarters, posted a 1% increase. Only the
grooming unit, which includes Gillette razors, fared worse, with a
1% decline.
P&G said net sales for the quarter were $17.2 billion, up 5%
versus the prior year. Diluted net earnings per share were $1.12,
an 8% percent increase from the prior year, which is what analysts
polled by FactSet predicted. Core earnings per share increased 10%
to $1.17.
The big question facing P&G is how the company will fare in
an economic downturn. P&G's lineup is dominated by higher-end
products, and premium offerings from all-natural diapers to
high-tech razors have buoyed results in recent years.
Executives have said they believe the company has positioned
itself to weather an economic downturn by investing in lower-price
products in major categories such as detergent, diapers and
razors.
The company maintained its guidance for organic sales and net
earnings per share. It lowered estimates for revenue growth, to 3%
to 4%, from 4% to 5%, because of a worse-than-expected impact of
currency fluctuations.
Write to Sharon Terlep at sharon.terlep@wsj.com
(END) Dow Jones Newswires
April 17, 2020 07:14 ET (11:14 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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