Procter & Gamble's shares jumped on Friday morning when the company announced that beauty sales in the last quarter contributed to higher-than-expected sales growth. The profit forecast for the full year was also maintained.
"This keeps us on track to meet our goals for the fiscal year," said CEO David Taylor in
The Net income for the quarter ending September 30 climbed 12 percent to $ 3.20 billion or $ 1.22 per share from $ 2.85 billion or $ 1.06 per share a year ago. Excluding one-time items, P & G earned $ 1.12 cents a share, 3 cents more than analysts' consensus.
Sales were $ 16.69 billion, compared to $ 16.65 billion a year ago. That was before analysts expected $ 16.46 billion. It posted organic sales growth of 4 percent, which masked the impact of currency and other adjustments, outperforming expectations for a plus of 1.6 percent and driven by growth in the beauty division. The company owns major brands in this category such as Pantene for shampoo and Old Spice for deodorant.
P & G said, Beauty Net Sales rose 5 percent in the last quarter, while sales in the Fabric and Home Care segment – P & G's largest unit after sales – climbed 2 percent. This helped to offset the 1% drop in the care category, a 3% decline in healthcare, and a 3% decline in baby, woman and family care.
Homeware producers such as Tide Detergent, Crest Toothpaste and Charmin Toilet Paper defended their market share against fiercer competition from brands and upstart companies such as Brandless, Harry's and Dollar Shave Club. The Gillette brand for razors had problems as new entrants entered the market and lowered prices.
P & G's profit margins were also depressed by rising raw material costs, transportation costs and exchange rates.
"We expect revenue The progress we make and the profit that pays off," CFO Jon Mueller said on Friday morning in CNBC's "Squawk Box". "There is a very strong underlying economy, and we see – despite some of these fears – an increase in market growth that you increasingly expect with unemployment and, ultimately, the wage situation."
said P & G For the fiscal year 2019, the company expects organic sales growth of 2 to 3 percent. Core earnings per share are expected to rise 3 to 8 percent, compared to a core profit of $ 4.22 in 2018.
The stock has so far dropped 11 percent year, bringing the market capitalization of P & G to around $ 202 billion increase.