Why Procter & Gamble Shares Are Gaining Today

Procter & Gamble Co PG reported fourth-quarter FY23 sales growth of 5% year-on-year to $20.55 billion, beating the analyst consensus of $19.98 billion.

Organic sales increased 8%, driven by a 7% increase from higher pricing and a 2% increase from a favorable product mix, partially offset by a 1% decrease in shipment volume.

Sales in the Beauty segment rose 8%, the Grooming segment gained 3%, and Health Care increased 3%.

Adjusted EPS of $1.37 beat the analyst consensus of $1.32.

Gross profit increased 14% Y/Y to $9.94 billion. The reported gross margin increased by 380 basis points to 48.4%.

Operating margin expanded 190 basis points to 20.3%, while operating income for the quarter rose 16% to $4.16 billion.

P&G held $8.24 billion in cash and equivalents as of June 30, 2023. Operating cash flow for the quarter was $5.3 billion.

The company returned over $16 billion of value to shareholders in fiscal 2023 via $9 billion in dividend payments and $7.4 billion of share repurchases.

"The April-June quarter provided a very strong finish to fiscal year 2023 – top-line growth, bottom-line growth, and cash generation," said Board Chairman, President, and CEO Jon Moeller.

"The team met or exceeded our going-in plans for sales, earnings, and cash in a difficult operating environment and despite significant cost headwinds."

Outlook: P&G sees FY24 organic sales growth of 4%-5% and all-in sales growth of 3%-4% 

P&G sees FY24 EPS of $6.25-$6.43 versus the consensus of $6.38.

P&G said its current fiscal 2024 outlook estimates a net benefit of around $400 million after-tax from favorable commodity costs net of unfavorable foreign exchange.

P&G said it expects a core effective tax rate to be approximately 20% in fiscal 2024.

P&G also expects to pay over $9 billion in dividends and repurchase $5 billion-$6 billion of common shares in FY24.

Price Action: PG shares are trading higher by 1.82% at $154.88 in premarket on the last check Friday.