Gillette Parent Procter & Gamble Q2 Earnings: Navigates Commodity And Forex Challenges, Maintains Core FY25 Outlook

Procter & Gamble Company PG shares are trading higher in premarket on Wednesday after the second-quarter earnings results.

The company reported second-quarter sales growth of 2% year-on-year to $21.9 billion, beating the analyst consensus estimate of $21.542 billion.

Organic sales increased 3%, driven by a 2% increase in organic volume and a 1% increase from the favorable geographic mix.

Sales in the Beauty segment remained flat, the Grooming segment gained 1%, and Health Care increased 2%.

Adjusted EPS of $1.88 beat the consensus estimate of $1.86.

Gross profit increased 1% Y/Y to $11.46 billion. The reported gross margin decreased by 30 basis points to 52.4%.

Operating margin expanded 550 basis points to 26.2%, while operating income for the quarter jumped 30% to $5.7 billion.

P&G held $10.23 billion in cash and equivalents at December-end. Operating cash flow for the quarter was $4.8 billion.

“The P&G team delivered an acceleration in organic sales growth, core EPS growth and strong cash return to shareowners in the second quarter,” said Board Chairman, President, and CEO Jon Moeller.

“Our first-half results keep us on track to deliver within our guidance ranges on all key financial metrics for the fiscal year.”

Outlook: P&G maintained its guidance range for FY25 organic sales growth of 3%-5% and all-in sales growth of 2%-4%. P&G maintained its FY25 EPS growth outlook of 10%-12% versus an EPS of $6.02 in FY24.

P&G reiterated its adjusted EPS outlook of $6.91 – $7.05 versus the $6.93 estimate. P&G continues to expect a commodity cost headwind of approximately $200 million after tax for fiscal 2025.

P&G expects unfavorable foreign exchange rates will be a headwind of approximately $300 million after tax.

P&G continues to expect adjusted free cash flow productivity of 90% and expects to pay around $10 billion in dividends and repurchase $6 billion to $7 billion of common shares in fiscal 2025.

Price Action: PG shares are trading higher by 3.44% at $167.29 in premarket at the last check Wednesday. 

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