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Procter & Gamble (PG) Widens Spectrum on Value Creation
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The Procter & Gamble Company (PG - Free Report) has been making relentless efforts to establish superiority, reduce costs to enable investment and value creation and further strengthen its organization. The company is focused on productivity and cost-saving plans to boost margins. These improvements are aimed at mitigating costs and currency obstacles, expanding profit margins, and generating a significant cash flow.
Let’s Introspect
Procter & Gamble, which is a renowned consumer products company, conducts business in more than 180 countries. It has an ongoing commitment to investing in its business, and strategies to counteract external cost challenges and achieve balanced growth in revenues and profits, highlighting its dedication to enhancing productivity.
The company is experiencing cost reductions and operational enhancements across all operations. In the third quarter of fiscal 2023, gross productivity savings aided PG’s gross margin by 210 bps, whereas the operating margin included productivity savings of 290 bps. SG&A expenses in the quarter reflected productivity savings of 80 bps.
During the Investor Day held on November 17, 2022, the company noted that there is a clear potential for increased productivity in the coming years through its Supply Chain 3.0. initiative. The initiative focusing on automation and digital capabilities are expected to yield $1.5 billion in savings in the near term. The company expects to generate annual revenues of $400-$500 million from media and programmatic savings worldwide, specifically through improved scheduling and purchasing capabilities, in the near term.
Image Source: Zacks Investment Research
These positives have led to a 4.2% increase in the shares of this Zacks Rank #3 (Hold) company in the past year, against the industry’s growth of 6%.
PG’s extensive range of products plays a crucial role in fulfilling the daily health, hygiene and cleaning requirements of consumers worldwide. The company demonstrated consistent and robust performance in the third quarter of the fiscal year 2023, driven by the strong performance of its brands and effective strategies that contributed to organic sales growth. Excluding the effects of acquisitions, divestitures and foreign exchange, revenues increased 7% organically. This growth was driven by a 10% rise in pricing and a 1% improvement from a favorable product mix, partially offset by a 3% decrease in volume.
Multiple segments are experiencing positive growth in organic sales due to pricing strategies and innovative products. For instance, the company’s latest innovation – Ariel Coldwater and Tide Coldwater – provide effective cleaning solution using cold water. These innovations effectively address concerns and pressures faced by consumers.
Procter & Gamble is relentlessly working to provide reliable and effective products in the laundry and baby care categories. PG’s focus is on providing quality and assurance to meet consumer needs in these critical areas has gone a long way in the growth of the company.
P&G raised its guidance for fiscal 2023 all-in sales to grow one percent versus the prior fiscal year, from a prior guidance range of down one percent to in-line. The company also raised its outlook for organic sales growth to 6% from the prior fiscal year’s reported figure from the previously mentioned 4-5%. Foreign exchange will negatively impact all-in sales growth for the fiscal year 2023 by five percentage points.
3 Picks You Can’t Miss Out On
Here we have highlighted three better-ranked stocks, namely The Clorox Company (CLX - Free Report) , Colgate-Palmolive (CL - Free Report) and Church & Dwight Company (CHD - Free Report) .
Clorox, which is engaged in the production, marketing and sale of consumer products in the United States and international markets, currently carries a Zacks Rank #2 (Buy). The company’s expected EPS growth rate for three to five years is 12.5%.
The Zacks Consensus Estimate for Clorox’s current financial-year revenues and EPS suggests growth of 2% and 11.2%, respectively, from the year-ago reported figure. Clorox has a trailing four-quarter earnings surprise of 25.5%, on average.
Colgate-Palmolive, which is a leading consumer goods company, carries a Zacks Rank #2 at present. The company’s expected EPS growth rate for three to five years is 6.2%.
The Zacks Consensus Estimate for Colgate-Palmolive’s current financial-year sales and earnings suggests growth of 6.3% and 5.7% from the year-ago period. CL has a trailing four-quarter earnings surprise of 1.4%, on average.
Church & Dwight Company, which develops, manufactures and markets a broad range of household, personal care and specialty products, currently carries a Zacks Rank #2. The company’s expected EPS growth rate for three to five years is 7.9%.
The Zacks Consensus Estimate for Church & Dwight Company’s current financial-year sales and earnings suggests growth of 7.1% and 4.4% from the year-ago period’s actuals. CHD has a trailing four-quarter earnings surprise of 9.8%, on average.
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Procter & Gamble (PG) Widens Spectrum on Value Creation
The Procter & Gamble Company (PG - Free Report) has been making relentless efforts to establish superiority, reduce costs to enable investment and value creation and further strengthen its organization. The company is focused on productivity and cost-saving plans to boost margins. These improvements are aimed at mitigating costs and currency obstacles, expanding profit margins, and generating a significant cash flow.
Let’s Introspect
Procter & Gamble, which is a renowned consumer products company, conducts business in more than 180 countries. It has an ongoing commitment to investing in its business, and strategies to counteract external cost challenges and achieve balanced growth in revenues and profits, highlighting its dedication to enhancing productivity.
The company is experiencing cost reductions and operational enhancements across all operations. In the third quarter of fiscal 2023, gross productivity savings aided PG’s gross margin by 210 bps, whereas the operating margin included productivity savings of 290 bps. SG&A expenses in the quarter reflected productivity savings of 80 bps.
During the Investor Day held on November 17, 2022, the company noted that there is a clear potential for increased productivity in the coming years through its Supply Chain 3.0. initiative. The initiative focusing on automation and digital capabilities are expected to yield $1.5 billion in savings in the near term. The company expects to generate annual revenues of $400-$500 million from media and programmatic savings worldwide, specifically through improved scheduling and purchasing capabilities, in the near term.
Image Source: Zacks Investment Research
These positives have led to a 4.2% increase in the shares of this Zacks Rank #3 (Hold) company in the past year, against the industry’s growth of 6%.
PG’s extensive range of products plays a crucial role in fulfilling the daily health, hygiene and cleaning requirements of consumers worldwide. The company demonstrated consistent and robust performance in the third quarter of the fiscal year 2023, driven by the strong performance of its brands and effective strategies that contributed to organic sales growth. Excluding the effects of acquisitions, divestitures and foreign exchange, revenues increased 7% organically. This growth was driven by a 10% rise in pricing and a 1% improvement from a favorable product mix, partially offset by a 3% decrease in volume.
Multiple segments are experiencing positive growth in organic sales due to pricing strategies and innovative products. For instance, the company’s latest innovation – Ariel Coldwater and Tide Coldwater – provide effective cleaning solution using cold water. These innovations effectively address concerns and pressures faced by consumers.
Procter & Gamble is relentlessly working to provide reliable and effective products in the laundry and baby care categories. PG’s focus is on providing quality and assurance to meet consumer needs in these critical areas has gone a long way in the growth of the company.
P&G raised its guidance for fiscal 2023 all-in sales to grow one percent versus the prior fiscal year, from a prior guidance range of down one percent to in-line. The company also raised its outlook for organic sales growth to 6% from the prior fiscal year’s reported figure from the previously mentioned 4-5%. Foreign exchange will negatively impact all-in sales growth for the fiscal year 2023 by five percentage points.
3 Picks You Can’t Miss Out On
Here we have highlighted three better-ranked stocks, namely The Clorox Company (CLX - Free Report) , Colgate-Palmolive (CL - Free Report) and Church & Dwight Company (CHD - Free Report) .
Clorox, which is engaged in the production, marketing and sale of consumer products in the United States and international markets, currently carries a Zacks Rank #2 (Buy). The company’s expected EPS growth rate for three to five years is 12.5%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Clorox’s current financial-year revenues and EPS suggests growth of 2% and 11.2%, respectively, from the year-ago reported figure. Clorox has a trailing four-quarter earnings surprise of 25.5%, on average.
Colgate-Palmolive, which is a leading consumer goods company, carries a Zacks Rank #2 at present. The company’s expected EPS growth rate for three to five years is 6.2%.
The Zacks Consensus Estimate for Colgate-Palmolive’s current financial-year sales and earnings suggests growth of 6.3% and 5.7% from the year-ago period. CL has a trailing four-quarter earnings surprise of 1.4%, on average.
Church & Dwight Company, which develops, manufactures and markets a broad range of household, personal care and specialty products, currently carries a Zacks Rank #2. The company’s expected EPS growth rate for three to five years is 7.9%.
The Zacks Consensus Estimate for Church & Dwight Company’s current financial-year sales and earnings suggests growth of 7.1% and 4.4% from the year-ago period’s actuals. CHD has a trailing four-quarter earnings surprise of 9.8%, on average.