Procter & Gamble's ($PG) first-quarter earnings exceeded market estimates, despite a revenue miss, as the consumer goods giant reaffirmed its guidance for the current fiscal year. The adjusted earnings per share rose to $1.93 for the three-month period that ended in September, up from $1.83 in the same quarter last year, surpassing the consensus estimate of $1.90 as per Capital IQ's poll.
Meanwhile, revenues fell to $21.74 billion from $21.87 billion the previous year, falling short of the anticipated $21.98 billion. In terms of product pricing, the report indicated a modest overall gain of 1%, although volume and product mix remained flat. Notably, foreign exchange fluctuations had a detrimental impact of 1% on the company's topline results.
However, on an organic basis, the sales experienced a positive uptick of 2% for the quarter. A closer look at the company's segments reveals a decline in the beauty sector, with sales dropping by 5% to $3.89 billion. The grooming segment remained steady at $1.72 billion, while both the healthcare and fabric & home care segments reported revenue growths of 2% and 1%, respectively.
Conversely, the division focusing on baby, feminine, and family care experienced a slight decrease of 2% in sales, totaling $5.1 billion. Despite the challenges, Procter & Gamble’s gross margin showcased resilience, improving by 10 basis points on a currency-neutral basis compared to the previous year, bolstered by higher pricing and productivity enhancements.
Additionally, the company's selling, general, and administrative expenses saw a reduction to $5.52 billion, down from $5.6 billion in the prior-year quarter. It’s important to note that the company incurred incremental after-tax charges close to $800 million during this quarter, primarily attributed to the restructuring of its limited market portfolio as it wound down operations in Argentina. Chief Executive Jon Moeller remarked, "Our organic sales growth, earnings, and cash results in the first quarter keep us on track to deliver within our guidance ranges on all key financial metrics for the fiscal year." He added, "We remain committed to our integrated growth strategy of a focused product portfolio." Procter & Gamble projects adjusted earnings per share to fall between $6.91 and $7.05 for the fiscal year 2025.
The market anticipates normalized earnings to be around $6.95 per share. The company has also retained its sales growth forecast for the full year at 2% to 4%, keeping organic sales growth estimates at 3% to 5%. Currently, the market is estimating revenue of approximately $86.2 billion for the ongoing fiscal year. Price: 170.62, Change: -0.65, Percent Change: -0.38.