Procter & Gamble Continues to Impress Despite Drop in Volume

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Procter & Gamble (NYSE:PG) stock dropped 3% on Thursday after reporting earnings that did not meet Wall Street’s expectations, despite the company posting record sales and beating its competitors on pricing power. The drop in share price was likely caused by lower-than-expected volume; P&G’s sales were flat year-over-year, while analysts had expected at least a 1% increase. The company lost market share in several product categories, including dishwashing soap, laundry detergent, and toothpaste. Despite these missed expectations, the earnings report shows what’s going right at P&G.

On Wednesday, Procter & Gamble released quarterly earnings and sales that above analysts’ expectations due to greater pricing offsetting weaker demand for its goods.

But the business also stated that it now anticipates that foreign exchange would have a more negative impact on its fiscal 2023 performance. P&G reported that its current earnings per share projection is at the low end of its previous range of flat to up 4%. Its net sales are also anticipated to decrease 1% to 3%, which is less than its earlier forecast of flat to positive 2%.

Premarket trading saw a 1.8% increase in the stock.

According to a Refinitiv poll of analysts, the following discrepancy exists between what the firm reported and what Wall Street was anticipating:

$1.57 per share in earnings against $1.54 anticipated
Revenue: $20.61 billion vs the anticipated $20.28 billion
P&G reported a net income of $3.94 billion, or $1.57 per share, for the fiscal first quarter, down from $4.11 billion, or $1.61 per share, in the same period last year.

In excess of forecasts of $20.28 billion, net sales increased 1% to $20.61 billion.

U.S. net sales decreased 1% on a constant-currency basis, or 1% excluding currency impacts, with growth driven by higher prices and foreign exchange rates. Sales volume dropped 2%.

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