P&G Q2 Sales Fall 1%

Procter & Gamble’s second quarter sales fell 1% to $20.8 billion. The company blamed unfavorable foreign exchange, which had a 6% impact on net sales. P&G noted that organic sales rose 5%. Those results were driven by a 10% increase from higher pricing and a 1% increase from positive product mix, partially offset by a 6% decrease in shipment volumes. Still, company officials remained upbeat.

“We delivered solid results in the second quarter of fiscal year 2023 in what continues to be a very difficult cost and operating environment,” said Chairman, President and CEO Jon Moeller. “Progress against our plan fiscal year to date enables us to raise our sales growth outlook for fiscal 2023 and maintain our guidance range for EPS growth despite significant headwinds. We remain committed to our integrated strategies of a focused product portfolio, superiority, productivity, constructive disruption and an agile and accountable organization structure. These strategies have enabled us to build and sustain strong momentum. They remain the right strategies to navigate through the near-term challenges we’re facing and continue to deliver balanced growth and value creation.”

In fact, P&G raised its guidance for fiscal 2023 all-in sales to a range of down 1% to in-line versus the prior fiscal year from a prior range of down 1-3%. The company raised its outlook for organic sales growth to a range of 4-5% from a prior growth range of 3-5%. The company expects foreign exchange to create a 5% headwind to all-in sales growth for the fiscal year.

Here’s a look at organic results by segment:

• Beauty organic sales increased 3%. Skin and personal care sales increased low single digits due to innovation-driven volume growth and higher pricing, partially offset by negative mix from covid-related declines in SK-II. Haircare organic sales increased mid-single digits driven by increased pricing, partially offset by volume declines due to market contraction.

• Grooming organic sales were flat. Higher pricing was fully offset by volume decline and negative mix, due to market contraction and retailer inventory reductions of appliances.

• Health care organic sales increased 8%. Oral care organic sales increased low single digits due to increased pricing and favorable geographic mix, partially offset by volume declines due to portfolio reduction in Russia and covid-related disruptions in Greater China. Personal health care organic sales increased high-teens due to increased pricing, favorable mix and volume growth driven by a strong cough, cold and flu season.

• Fabric and home care organic sales increased 8%. Fabric care organic sales increased high single digits due to increased pricing, partially offset by volume declines due to market contraction and increased pricing, primarily in Europe. Home care organic sales increased high single digits due to increased pricing, partially offset by volume declines versus a high base period of increased consumption of cleaning products.

• Baby, feminine and family care sales increased 4%. Baby care organic sales increased low single digits due to increased pricing, partially offset by volume declines from market contraction. Feminine care organic sales increased high single digits driven by increased pricing and positive geographic mix, partially offset by volume declines in emerging markets. Family care organic sales increased low single digits due to increased pricing, partially offset by lower volumes due to market contraction and market share softness.