Procter & Gamble on Wednesday raised its outlook for the second consecutive quarter.
It also said its second-quarter revenue rose 8%, fueled by higher demand for its cleaning products and shaving and styling products as the pandemic continues to guide consumer behavior.
The company, whose brands include Tide, Pampers and Bounty, now expects sales growth of 5% to 6% in fiscal 2021, up from its prior outlook of 3% to 4% growth. It is also forecasting that its adjusted earnings will rise 8% to 10%, up from the previous target of 5% to 8%.
Shares of the company fell 1% in early trading Wednesday.
Here’s what the company reported for the quarter ended Dec. 31 compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: $1.64, adjusted vs. $1.51 expected
- Revenue: $19.75 billion vs. $19.27 billion expected
P&G reported fiscal second-quarter net income of $3.85 billion, or $1.47 per share, up from $3.72 billion, or $1.41 per share, a year earlier.
Excluding items, the company earned $1.64 per share, beating the $1.51 per share expected by analysts surveyed by Refinitiv.
Net sales rose 8% to $19.75 billion, topping expectations of $19.27 billion. Its organic sales, which strip out the impact of acquisitions, divestitures and foreign currency, also rose 8%. New products helped lift the quarter’s sales.
“It’s a combination of products that were planned and a quick response to real, emerging needs,” CFO and COO Jon Moeller said on CNBC’s “Squawk Box.”
Its Microban 24-hour disinfecting spray, for example, launched in February just before U.S. consumers began buying up every cleaning product they could find because of the pandemic.
P&G’s fabric and home care segment saw organic sales rise 12% in the quarter, the company’s largest increase by business unit. Home care, which includes Comet cleaning products, saw organic sales growth of 30% as more consumers cleaned surfaces and dishes.
The health-care segment, which includes Oral B and Vicks products, reported organic sales growth of 9%. Price increases combined with consumer demand for higher-end products boosted sales. But the company said demand for its respiratory products was lower this year because fewer people contracted colds or the flu.
The grooming and baby, feminine and family care segments saw organic sales rise 6% in the quarter. Organic sales of P&G’s grooming appliances jumped 20% as consumers look for at-home styling and shaving products.
P&G’s beauty segment, which includes Olay and SK-II, reported organic sales growth of 5%.
The distribution of vaccines has prompted questions abut whether consumer giants like P&G or Conagra Brands will be able to sustain the same pace of growth once their customers are back to their previous routines. Moeller said on a press call that there will likely be reduced demand for some of its products that experienced significant sales surges, but other products that were weakened by recent trends may bounce back. The company is also predicting the disappearance of “some very strong headwinds,” like supply chain challenges.
In fiscal 2021, P&G is forecasting foreign currency headwinds that will cost about $100 million after tax, as well as higher freight costs that will also cost $100 million after tax.
The company expects it will buy back as much as $10 billion of its own stock during the fiscal year, up from a prior estimate of $7 billion to $9 billion.