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Solid Demand Trends to Aid Procter & Gamble's (PG) Q1 Earnings
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The Procter & Gamble Company (PG - Free Report) is set to report first-quarter fiscal 2024 results on Oct 18, before the opening bell. The company is expected to deliver sales and earnings growth in the to-be-reported quarter.
The Zacks Consensus Estimate for the company’s fiscal first-quarter earnings is pegged at $1.71 per share, indicating an 8.9% increase from the year-ago quarter’s reported figure. The consensus mark has been unchanged in the past 30 days. For fiscal first-quarter revenues, the consensus mark is pegged at $21.64 billion, suggesting a 5% rise from the prior-year quarter’s reported figure.
In the last reported quarter, the company recorded an earnings surprise of 3.8%. It has delivered a bottom-line beat of 2.4%, on average, in the trailing four quarters.
Procter & Gamble Company (The) Price and EPS Surprise
Procter & Gamble has been demonstrating its dominance in the global market by strategically leveraging its brand strength to drive organic sales growth. As a manufacturer of products catering to the essential daily needs of consumers worldwide, P&G's success in the preceding quarters can be attributed to its robust brand portfolio and effective business strategies. The persistence of these trends is expected to get reflected in the company’s organic sales for the fiscal first quarter.
We expect organic sales to increase 5.3% in the to-be-reported quarter. Organic sales are expected to increase 9% for the Beauty segment, 2% for Grooming, 2% for Fabric & Home Care, 4% for Health Care, and 9% for the Baby, Feminine & Family Care segment.
P&G has been diligently pursuing cost-saving and productivity measures to drive margins and reinforce its competitive advantage. The company's commitment to enhancing productivity while mitigating macro cost headwinds has been integral to maintaining a balanced top and bottom-line growth. Its focus on productivity and cost-saving plans are likely to have boosted margins in the to-be-reported quarter.
We expect P&G's core gross margin for the fiscal first quarter to have been influenced by significant productivity savings. Our model predicts a core gross margin expansion of 100 bps for the to-be-reported quarter.
However, currency headwinds are likely to have hurt the company’s performance in the to-be-reported quarter. Rising input costs are expected to have partly weighed on the fiscal first-quarter performance. Additionally, Procter & Gamble has been witnessing elevated SG&A expenses due to higher supply-chain costs, rising inflation and elevated transportation expenses.
On the last reported quarter’s earnings call, management pointed out that the ongoing supply-chain issues, higher transportation costs, geopolitical challenges, currency headwinds and rising inflation might continue to impact consumer confidence throughout fiscal 2024. The persistence of these headwinds is likely to get reflected in the company’s bottom-line performance to some extent.
Our estimate indicates a 1% impact from currency headwinds in the first quarter of fiscal 2024. Meanwhile, our estimate for core SG&A expenses of $5.1 billion indicates a year-over-year rise of 6.3%. As a percentage of sales, core SG&A expenses are estimated to reflect a 50-bps expansion from the year-ago quarter. Consequently, our model suggests a 50-bps operating margin expansion to 24.5% in the fiscal first quarter.
Zacks Model
Our proven model conclusively predicts an earnings beat for Procter & Gamble this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Procter & Gamble has a Zacks Rank #3 and an Earnings ESP of +1.42%.
Stocks With Favorable Combination
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to deliver an earnings beat this time around.
Molson Coors (TAP - Free Report) currently has an Earnings ESP of +3.46% and a Zacks Rank #3. TAP is anticipated to register top and bottom-line growth when it reports third-quarter 2023 results. The Zacks Consensus Estimate for Molson Coors’ quarterly revenues is pegged at $3.25 billion, indicating an increase of 10.6% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Molson Coors’ bottom line has been unchanged in the past 30 days at $1.52 per share. The consensus estimate for earnings suggests a rise of 15.2% from the prior-year quarter’s reported figure. TAP has delivered an earnings beat of 34.2%, on average, in the trailing four quarters.
Hershey (HSY - Free Report) currently has an Earnings ESP of +2.21% and a Zacks Rank #3. The company is expected to register top and bottom-line growth when it reports third-quarter 2023 numbers. The Zacks Consensus Estimate for HSY’s quarterly revenues is pegged at $2.98 billion, which suggests an increase of 9.2% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for HSY’s quarterly earnings has moved up by a penny to $2.48 in the past 30 days, suggesting a 14.3% rise from the year-ago quarter’s reported number. HSY has delivered an earnings beat of 8.9%, on average, in the trailing four quarters.
Celsius (CELH - Free Report) has an Earnings ESP of +6.92% and a Zacks Rank #3 at present. The company is expected to register top and bottom-line growth when it reports third-quarter 2023 numbers. The Zacks Consensus Estimate for its quarterly revenues is pegged at $344.3 million, which suggests growth of 82.9% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Celsius’ quarterly earnings has moved down by a penny in the past 30 days to 50 cents per share. The consensus estimate for earnings suggests a significant improvement of 168.5% from the year-ago quarter. CELH has delivered a negative earnings surprise of 86.6%, on average, in the trailing four quarters.
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Solid Demand Trends to Aid Procter & Gamble's (PG) Q1 Earnings
The Procter & Gamble Company (PG - Free Report) is set to report first-quarter fiscal 2024 results on Oct 18, before the opening bell. The company is expected to deliver sales and earnings growth in the to-be-reported quarter.
The Zacks Consensus Estimate for the company’s fiscal first-quarter earnings is pegged at $1.71 per share, indicating an 8.9% increase from the year-ago quarter’s reported figure. The consensus mark has been unchanged in the past 30 days. For fiscal first-quarter revenues, the consensus mark is pegged at $21.64 billion, suggesting a 5% rise from the prior-year quarter’s reported figure.
In the last reported quarter, the company recorded an earnings surprise of 3.8%. It has delivered a bottom-line beat of 2.4%, on average, in the trailing four quarters.
Procter & Gamble Company (The) Price and EPS Surprise
Procter & Gamble Company (The) price-eps-surprise | Procter & Gamble Company (The) Quote
Key Factors to Note
Procter & Gamble has been demonstrating its dominance in the global market by strategically leveraging its brand strength to drive organic sales growth. As a manufacturer of products catering to the essential daily needs of consumers worldwide, P&G's success in the preceding quarters can be attributed to its robust brand portfolio and effective business strategies. The persistence of these trends is expected to get reflected in the company’s organic sales for the fiscal first quarter.
We expect organic sales to increase 5.3% in the to-be-reported quarter. Organic sales are expected to increase 9% for the Beauty segment, 2% for Grooming, 2% for Fabric & Home Care, 4% for Health Care, and 9% for the Baby, Feminine & Family Care segment.
P&G has been diligently pursuing cost-saving and productivity measures to drive margins and reinforce its competitive advantage. The company's commitment to enhancing productivity while mitigating macro cost headwinds has been integral to maintaining a balanced top and bottom-line growth. Its focus on productivity and cost-saving plans are likely to have boosted margins in the to-be-reported quarter.
We expect P&G's core gross margin for the fiscal first quarter to have been influenced by significant productivity savings. Our model predicts a core gross margin expansion of 100 bps for the to-be-reported quarter.
However, currency headwinds are likely to have hurt the company’s performance in the to-be-reported quarter. Rising input costs are expected to have partly weighed on the fiscal first-quarter performance. Additionally, Procter & Gamble has been witnessing elevated SG&A expenses due to higher supply-chain costs, rising inflation and elevated transportation expenses.
On the last reported quarter’s earnings call, management pointed out that the ongoing supply-chain issues, higher transportation costs, geopolitical challenges, currency headwinds and rising inflation might continue to impact consumer confidence throughout fiscal 2024. The persistence of these headwinds is likely to get reflected in the company’s bottom-line performance to some extent.
Our estimate indicates a 1% impact from currency headwinds in the first quarter of fiscal 2024. Meanwhile, our estimate for core SG&A expenses of $5.1 billion indicates a year-over-year rise of 6.3%. As a percentage of sales, core SG&A expenses are estimated to reflect a 50-bps expansion from the year-ago quarter. Consequently, our model suggests a 50-bps operating margin expansion to 24.5% in the fiscal first quarter.
Zacks Model
Our proven model conclusively predicts an earnings beat for Procter & Gamble this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Procter & Gamble has a Zacks Rank #3 and an Earnings ESP of +1.42%.
Stocks With Favorable Combination
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to deliver an earnings beat this time around.
Molson Coors (TAP - Free Report) currently has an Earnings ESP of +3.46% and a Zacks Rank #3. TAP is anticipated to register top and bottom-line growth when it reports third-quarter 2023 results. The Zacks Consensus Estimate for Molson Coors’ quarterly revenues is pegged at $3.25 billion, indicating an increase of 10.6% from the figure reported in the prior-year quarter.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Molson Coors’ bottom line has been unchanged in the past 30 days at $1.52 per share. The consensus estimate for earnings suggests a rise of 15.2% from the prior-year quarter’s reported figure. TAP has delivered an earnings beat of 34.2%, on average, in the trailing four quarters.
Hershey (HSY - Free Report) currently has an Earnings ESP of +2.21% and a Zacks Rank #3. The company is expected to register top and bottom-line growth when it reports third-quarter 2023 numbers. The Zacks Consensus Estimate for HSY’s quarterly revenues is pegged at $2.98 billion, which suggests an increase of 9.2% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for HSY’s quarterly earnings has moved up by a penny to $2.48 in the past 30 days, suggesting a 14.3% rise from the year-ago quarter’s reported number. HSY has delivered an earnings beat of 8.9%, on average, in the trailing four quarters.
Celsius (CELH - Free Report) has an Earnings ESP of +6.92% and a Zacks Rank #3 at present. The company is expected to register top and bottom-line growth when it reports third-quarter 2023 numbers. The Zacks Consensus Estimate for its quarterly revenues is pegged at $344.3 million, which suggests growth of 82.9% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Celsius’ quarterly earnings has moved down by a penny in the past 30 days to 50 cents per share. The consensus estimate for earnings suggests a significant improvement of 168.5% from the year-ago quarter. CELH has delivered a negative earnings surprise of 86.6%, on average, in the trailing four quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.