We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
P&G (PG) Gains From Solid Product Portfolio, Pricing Actions
Read MoreHide Full Article
The Procter & Gamble Company (PG - Free Report) , also known as P&G, is strong amid the ongoing uncertainty and difficult macroeconomic conditions. The company continues to gain from its product line, which plays a key role in meeting consumers' daily health, hygiene and cleaning needs. PG witnessed strong momentum in the fiscal fourth quarter, as reflected by the underlying strength in brands and appropriate strategies, which aided organic sales growth.
On an organic basis (excluding the impacts of acquisitions, divestitures and foreign exchange), revenues improved 8% year over year in fourth quarter of fiscal 2023, backed by a 7% rise in pricing and a 2% gain from a positive product mix, offset by a 1% decline in volumes. All the company’s business segments reported growth in organic sales. Organic sales rose 11% for Beauty, 8% each for the Grooming and Fabric & Home Care segments, 5% for Health Care, and 9% for the Baby, Feminine & Family Care segment.
Additionally, P&G’s robust pricing actions, favorable mix and improved productivity have been aiding its performance. The company’s focus on productivity and cost-saving plans positions it to drive margins in the future. Continued business investments also bode well.
Procter & Gamble has been focused on productivity and cost-saving plans to boost margins. P&G’s continued investment in its businesses, alongside efforts to offset macro cost headwinds and balance top and bottom-line growth, underscores its productivity efforts. The company is witnessing cost savings and efficiency improvements across all facets of the business.
Upbeat View
Procter & Gamble provided an optimistic view for fiscal 2024. The company anticipates year-over-year all-in sales growth of 3-4% for fiscal 2024. Organic sales are likely to increase 4-5% in fiscal 2024. The company expects the reported EPS to increase 6-9% year over year to $6.25-$6.43. It reported $5.90 in fiscal 2023. The midpoint of the EPS view of $6.34 suggests a year-over-year increase of 7.5%.
Things to Watch Out
Procter & Gamble has been witnessing elevated SG&A expenses due to higher supply-chain costs, rising inflation, and elevated transportation expenses. SG&A expenses, as a percentage of sales, expanded 190 bps from the year-ago quarter to 28.1% in the fiscal fourth quarter. On a currency-neutral basis, the SG&A expense rate increased 140 bps to 27.6%, driven by 470 bps of marketing and overhead investments.
PG&’s outlook for fiscal 2024 reflects supply-chain issues, higher transportation costs, geopolitical challenges, currency headwinds and rising inflation, which might impact consumer confidence.
Conclusion
Solid demand, brand strength and productivity efforts bode well, and will likely help PG stay afloat despite cost headwinds and rising inflation.
Peer Stocks
The company shares space with Colgate-Palmolive (CL - Free Report) , Clorox (CLX - Free Report) and Church & Dwight Co., Inc. (CHD - Free Report) in the Soaps & Cleaning Materials industry.
Colgate is a global leader in the oral care hygiene market. The company’s business strategy closely defines efforts to increase its leadership in key product categories through innovation in core businesses, tracking adjacent categories growth, and expansion into new markets and channels. Due to the shift of consumer preference to organic and natural ingredients, the company is expanding its Naturals range, including Naturals toothpaste.
Clorox is engaged in the production, marketing and sale of consumer products in the United States and international markets. CLX has been benefiting from a solid innovation pipeline, digital transformation, pricing and cost-saving efforts. It is on track with the IGNITE strategy, which focuses on the expansion of the key elements under the 2020 Strategy to pace up innovation in each area of business.
Church & Dwight produces and sells a broad range of household, personal care and specialty products. The company is well-positioned for growth on a strong brand portfolio and constant innovation. Moreover, CHD’s strategic buyouts are encouraging. The company has resorted to incremental pricing across its portfolio to counter rising costs.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
P&G (PG) Gains From Solid Product Portfolio, Pricing Actions
The Procter & Gamble Company (PG - Free Report) , also known as P&G, is strong amid the ongoing uncertainty and difficult macroeconomic conditions. The company continues to gain from its product line, which plays a key role in meeting consumers' daily health, hygiene and cleaning needs. PG witnessed strong momentum in the fiscal fourth quarter, as reflected by the underlying strength in brands and appropriate strategies, which aided organic sales growth.
On an organic basis (excluding the impacts of acquisitions, divestitures and foreign exchange), revenues improved 8% year over year in fourth quarter of fiscal 2023, backed by a 7% rise in pricing and a 2% gain from a positive product mix, offset by a 1% decline in volumes. All the company’s business segments reported growth in organic sales. Organic sales rose 11% for Beauty, 8% each for the Grooming and Fabric & Home Care segments, 5% for Health Care, and 9% for the Baby, Feminine & Family Care segment.
Additionally, P&G’s robust pricing actions, favorable mix and improved productivity have been aiding its performance. The company’s focus on productivity and cost-saving plans positions it to drive margins in the future. Continued business investments also bode well.
Procter & Gamble has been focused on productivity and cost-saving plans to boost margins. P&G’s continued investment in its businesses, alongside efforts to offset macro cost headwinds and balance top and bottom-line growth, underscores its productivity efforts. The company is witnessing cost savings and efficiency improvements across all facets of the business.
Upbeat View
Procter & Gamble provided an optimistic view for fiscal 2024. The company anticipates year-over-year all-in sales growth of 3-4% for fiscal 2024. Organic sales are likely to increase 4-5% in fiscal 2024. The company expects the reported EPS to increase 6-9% year over year to $6.25-$6.43. It reported $5.90 in fiscal 2023. The midpoint of the EPS view of $6.34 suggests a year-over-year increase of 7.5%.
Things to Watch Out
Procter & Gamble has been witnessing elevated SG&A expenses due to higher supply-chain costs, rising inflation, and elevated transportation expenses. SG&A expenses, as a percentage of sales, expanded 190 bps from the year-ago quarter to 28.1% in the fiscal fourth quarter. On a currency-neutral basis, the SG&A expense rate increased 140 bps to 27.6%, driven by 470 bps of marketing and overhead investments.
PG&’s outlook for fiscal 2024 reflects supply-chain issues, higher transportation costs, geopolitical challenges, currency headwinds and rising inflation, which might impact consumer confidence.
Conclusion
Solid demand, brand strength and productivity efforts bode well, and will likely help PG stay afloat despite cost headwinds and rising inflation.
Peer Stocks
The company shares space with Colgate-Palmolive (CL - Free Report) , Clorox (CLX - Free Report) and Church & Dwight Co., Inc. (CHD - Free Report) in the Soaps & Cleaning Materials industry.
Colgate is a global leader in the oral care hygiene market. The company’s business strategy closely defines efforts to increase its leadership in key product categories through innovation in core businesses, tracking adjacent categories growth, and expansion into new markets and channels. Due to the shift of consumer preference to organic and natural ingredients, the company is expanding its Naturals range, including Naturals toothpaste.
Clorox is engaged in the production, marketing and sale of consumer products in the United States and international markets. CLX has been benefiting from a solid innovation pipeline, digital transformation, pricing and cost-saving efforts. It is on track with the IGNITE strategy, which focuses on the expansion of the key elements under the 2020 Strategy to pace up innovation in each area of business.
Church & Dwight produces and sells a broad range of household, personal care and specialty products. The company is well-positioned for growth on a strong brand portfolio and constant innovation. Moreover, CHD’s strategic buyouts are encouraging. The company has resorted to incremental pricing across its portfolio to counter rising costs.