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These 3 Companies Have Recently Provided Upbeat Guidance
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There have been several pockets of strength during earnings season so far, particularly in the Consumer Staples sector. We’ve seen many companies in the realm come out and post better-than-expected results, with pricing power leading the way.
In fact, several companies – PepsiCo (PEP - Free Report) , Kimberly-Clark (KMB - Free Report) , and Procter & Gamble (PG - Free Report) – have raised guidance following better-than-expected quarterly results, causing buyers to swarm as of late.
Below is a chart illustrating the performance of all three stocks over the last month, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
As we can see, all three have displayed relative strength over the period, outperforming the market handily. Let’s take a deeper dive into each company’s current standing.
PepsiCo
PepsiCo reported earnings of $1.50 per share, handily exceeding the Zacks Consensus EPS Estimate by nearly 10%. Quarterly revenue totaled $17.8 billion, above expectations and improving 10% from the year-ago quarter.
Image Source: Zacks Investment Research
Investors cheered on the results, with PEP shares closing 2.5% higher post-earnings. The company’s shares have regularly gotten a boost following quarterly releases, as we can see illustrated below.
Image Source: Zacks Investment Research
Regarding the strong results, CEO Ramon Laguarta said, “We are very pleased with our performance and business momentum as our categories and geographies remained resilient during the first quarter. Given our strong start to the year, we now expect our full-year 2023 organic revenue to increase 8 percent (previously 6 percent) and core constant currency EPS to increase 9 percent (previously 8 percent).”
And consistent with its previous guidance for FY23, PepsiCo expects total cash returns to shareholders to total roughly $7.7 billion, consisting of $6.7 billion in dividends and share repurchases of $1 billion.
Kimberly-Clark
Kimberly-Clark also posted a double-beat, exceeding earnings expectations by nearly 25%. Top line results were also solid, with the company generating $5.2 billion in revenue and improving modestly from the year-ago quarter.
Image Source: Zacks Investment Research
In addition, KMB’s gross margin increased 340 basis points year-over-year, primarily driven by favorable net revenue realization amid increased prices. Cash generated from operations totaled $613 million, reflecting a sizable jump from the year-ago value of $204 million.
KMB shares saw a nice reaction from the market post-earnings, closing 1.5% higher. The market has had somewhat-mixed reactions following quarterly releases from Kimberly-Clark, as shown below.
Image Source: Zacks Investment Research
The company raised its FY23 EPS guidance, now expecting 6% - 10% growth compared to FY22 and up from prior views of 2% - 6%. In addition, KMB increased its operating profit outlook to low double digits, again up from the previous mid to high single digits expected.
Procter & Gamble
Like the companies above, Procter & Gamble posted better-than-expected results, exceeding the Zacks Consensus EPS Estimate by 3.8% and delivering a positive 4% revenue surprise. Earnings improved 3% year-over-year, whereas revenue saw growth of 4%.
Image Source: Zacks Investment Research
Impressively, PG’s recently declared dividend increase reflects the 67th consecutive year that the company has increased its dividend. The company returned more than $2.2 billion in dividends to shareholders throughout the quarter.
Image Source: Zacks Investment Research
Procter & Gamble raised its FY23 all-in revenue guidance, now expecting growth of 1% compared to FY22, up from a prior guidance range of down -1% to flat year-over-year. In addition, PG raised its organic revenue growth guidance for FY23, expecting growth of 6% compared to prior expectations of 4% – 5%.
Bottom Line
Stocks in the Zacks Consumer Staples sector carry a defensive nature, as these companies’ products have an advantageous ability to generate consistent demand in the face of many economic situations.
And as seen by the quarterly results from all three companies above – PepsiCo (PEP - Free Report) , Kimberly-Clark (KMB - Free Report) , and Procter & Gamble (PG - Free Report) – consumers have had little issue forking up extra cash for their products.
In addition to uplifting guidance, all three companies currently sport a favorable Zacks Rank #2 (Buy), indicating bullish sentiment among analysts.
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These 3 Companies Have Recently Provided Upbeat Guidance
There have been several pockets of strength during earnings season so far, particularly in the Consumer Staples sector. We’ve seen many companies in the realm come out and post better-than-expected results, with pricing power leading the way.
In fact, several companies – PepsiCo (PEP - Free Report) , Kimberly-Clark (KMB - Free Report) , and Procter & Gamble (PG - Free Report) – have raised guidance following better-than-expected quarterly results, causing buyers to swarm as of late.
Below is a chart illustrating the performance of all three stocks over the last month, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
As we can see, all three have displayed relative strength over the period, outperforming the market handily. Let’s take a deeper dive into each company’s current standing.
PepsiCo
PepsiCo reported earnings of $1.50 per share, handily exceeding the Zacks Consensus EPS Estimate by nearly 10%. Quarterly revenue totaled $17.8 billion, above expectations and improving 10% from the year-ago quarter.
Image Source: Zacks Investment Research
Investors cheered on the results, with PEP shares closing 2.5% higher post-earnings. The company’s shares have regularly gotten a boost following quarterly releases, as we can see illustrated below.
Image Source: Zacks Investment Research
Regarding the strong results, CEO Ramon Laguarta said, “We are very pleased with our performance and business momentum as our categories and geographies remained resilient during the first quarter. Given our strong start to the year, we now expect our full-year 2023 organic revenue to increase 8 percent (previously 6 percent) and core constant currency EPS to increase 9 percent (previously 8 percent).”
And consistent with its previous guidance for FY23, PepsiCo expects total cash returns to shareholders to total roughly $7.7 billion, consisting of $6.7 billion in dividends and share repurchases of $1 billion.
Kimberly-Clark
Kimberly-Clark also posted a double-beat, exceeding earnings expectations by nearly 25%. Top line results were also solid, with the company generating $5.2 billion in revenue and improving modestly from the year-ago quarter.
Image Source: Zacks Investment Research
In addition, KMB’s gross margin increased 340 basis points year-over-year, primarily driven by favorable net revenue realization amid increased prices. Cash generated from operations totaled $613 million, reflecting a sizable jump from the year-ago value of $204 million.
KMB shares saw a nice reaction from the market post-earnings, closing 1.5% higher. The market has had somewhat-mixed reactions following quarterly releases from Kimberly-Clark, as shown below.
Image Source: Zacks Investment Research
The company raised its FY23 EPS guidance, now expecting 6% - 10% growth compared to FY22 and up from prior views of 2% - 6%. In addition, KMB increased its operating profit outlook to low double digits, again up from the previous mid to high single digits expected.
Procter & Gamble
Like the companies above, Procter & Gamble posted better-than-expected results, exceeding the Zacks Consensus EPS Estimate by 3.8% and delivering a positive 4% revenue surprise. Earnings improved 3% year-over-year, whereas revenue saw growth of 4%.
Image Source: Zacks Investment Research
Impressively, PG’s recently declared dividend increase reflects the 67th consecutive year that the company has increased its dividend. The company returned more than $2.2 billion in dividends to shareholders throughout the quarter.
Image Source: Zacks Investment Research
Procter & Gamble raised its FY23 all-in revenue guidance, now expecting growth of 1% compared to FY22, up from a prior guidance range of down -1% to flat year-over-year. In addition, PG raised its organic revenue growth guidance for FY23, expecting growth of 6% compared to prior expectations of 4% – 5%.
Bottom Line
Stocks in the Zacks Consumer Staples sector carry a defensive nature, as these companies’ products have an advantageous ability to generate consistent demand in the face of many economic situations.
And as seen by the quarterly results from all three companies above – PepsiCo (PEP - Free Report) , Kimberly-Clark (KMB - Free Report) , and Procter & Gamble (PG - Free Report) – consumers have had little issue forking up extra cash for their products.
In addition to uplifting guidance, all three companies currently sport a favorable Zacks Rank #2 (Buy), indicating bullish sentiment among analysts.