Fabric & Home Care Sales Boost Procter & Gamble’s Q2 Results

Inflation pressures didn't stop Procter & Gamble in its fiscal second quarter. Fabric care and home care volume jumped 7%, the company reported today. Overall, Q2 net sales rose 6% to $21.0 billion. Organic sales also increased 6%. The increase in organic sales was driven by a 3% increase in shipment volumes and 3% increased pricing to help offset significant commodity and other input cost increases. Mix was neutral to net sales growth.

P&G raised its outlook for fiscal 2022 all-in sales growth to 3-4%, up from 2-4% versus the prior fiscal year. The company also raised its guidance for organic sales growth from a range of 2-4% to a range of 4-5%. Foreign exchange is now expected to be a one percentage point headwind to all-in sales growth for the fiscal year. But at the same time, P&G acknowledged inflation pressures. The company said its current fiscal 2022 outlook includes headwinds of $2.3 billion after-tax from higher commodity costs and $300 million after-tax from higher freight costs. In addition, the company expects $200 million after-tax pressure from negative foreign exchange impacts. 

“We delivered very strong top-line growth and made sequential progress on earnings in the face of significant cost headwinds,” said President and CEO Jon Moeller. “These results keep us on track to deliver our earnings outlook and to raise estimates for sales growth, cash productivity and cash return to shareowners. Our focus remains on the strategies of superiority, productivity, constructive disruption and continually improving P&G’s organization structure and culture. These strategies have enabled us to build and sustain strong momentum. They remain the right strategies to deliver balanced growth and value creation.”

By segment, beauty organic sales increased 2%. Skin care and personal care sales increased low single digits primarily driven by volume growth in personal care due to innovation, market growth and pricing, partially offset by negative product mix, according to P&G. Hair care organic sales increased low single digits primarily driven by increased pricing.

Grooming segment organic sales increased 5%. The company said shave care organic sales increased mid-single digits primarily due to volume growth, increased pricing and positive product and geographic mix from growth in developed markets. Appliances organic sales increased mid-single digits due to increased pricing and positive mix driven by the growth of premium shavers and stylers. This was partially offset by lower volumes versus a high base period which benefited from a pandemic-related consumption surge of in-home shavers and stylers.

Health care segment organic sales increased 8%. Oral care organic sales increased low single digits driven by positive mix from a higher proportion of premium paste and whitening products and innovation-based price increases. 

Fabric and home care segment organic sales increased 8%. Fabric care organic sales increased double-digits led by strong growth of unit dose detergents and fabric enhancers. Home care organic sales increased low single digits due to increased pricing and increased volume from innovation versus a high base period which also benefited from strong pandemic-related consumption of home cleaning products.

Baby, feminine and family care segment organic sales increased 5%. Baby care organic sales increased high single digits driven by increased pricing, market growth and positive product mix from the growth of premium taped and pant-style diapers.

Capital spending is estimated to be in the range of 4-5% of fiscal 2022 net sales.