The consumer giant also raised its forecast for raw material and freight costs for the remainder of the year, warning it believes inflation continues to rise.
The company’s shares fell 1.7% in pre-market trading.
Here’s what the company reported compared to what Wall Street expected, based on an analyst survey conducted by Refinitiv:
- Earnings per share: $ 1.61 vs. $ 1.59 expected
- Turnover: 20.34 billion dollars against 19.91 billion dollars expected
P&G reported first quarter net income of $ 4.11 billion, or $ 1.61 per share, from $ 4.28 billion, or $ 1.63 per share, a year earlier. Analysts polled by Refinitiv had expected earnings per share of $ 1.59.
Net sales rose 5% to $ 20.34 billion, beating expectations of $ 19.91 billion. Organic revenue, which excludes the impact of acquisitions, divestitures and foreign currencies, increased 4% in the quarter.
Price increases for certain P&G products, such as Pampers diapers, contributed to organic sales growth of 1%. Higher prices offset higher transportation costs in the quarter, but could not keep up with rising commodity costs. P&G CFO Andre Schulten told the Wall Street Journal the company would raise prices on even more commodities to deal with inflation.
P&G said it now expects after-tax raw material costs of $ 2.1 billion and transportation costs of $ 200 million to weigh on its FY2022 results. , the company predicted raw material and freight costs to hit profits of $ 1.9 billion.
Healthcare was the best performing segment of the company this quarter. The business unit, which includes brands like Oral-B and Vicks, recorded organic sales growth of 7%.
The company’s largest segment, fabrics and home care, recorded organic sales growth of 5%. The division includes Tide, Febreze and Mr. Clean products.
P & G’s grooming business, which includes Venus and Gillette razors, saw organic sales increase 4% in the quarter.
The company’s beauty and child care, feminine care and family care units both saw organic sales increase by 2%. The beauty segment, which includes Pantene and SK-II, saw higher organic sales in its hair care and skin care and personal care divisions, driven by higher volume and innovation in treatments and hair conditioners. P&G said it has seen more consumers buy its premium Pampers diapers and pants in the baby care segment, but organic sales of Charmin toilet paper and Bounty paper towels have fallen as it spends more on promotions.
Despite higher costs, P&G reiterated its earlier forecast for profit and revenue for the full year. P&G is calling for fiscal year sales to increase 2% to 4% from a year ago and basic earnings per share to increase 3% to 6%.
Read the full revenue report here.