P&G CFO: Shoppers are using their products with greater caution

P&G Faces Mixed Results Amid Cautious Consumer Spending

Despite ongoing financial pressures on American shoppers, Procter & Gamble continues to deliver a blend of results in its latest earnings report.

Shares of Procter & Gamble (PG) dropped by 1.5% in pre-market trading on Thursday. The company reported that sales in its grooming, fabric care, and baby product divisions fell short of expectations, as more consumers opted for less expensive store-brand alternatives.

Nevertheless, P&G exceeded profit forecasts and reaffirmed its guidance for the full fiscal year.

“We’re still seeing growth in our product categories in both the US and Europe, though the pace has slowed,” said CFO Andre Schulten in an interview with Yahoo Finance.

Schulten added, “Consumers are being more careful—using up what they have at home, measuring products more precisely, and adjusting how often they use them. These behaviors aren’t unusual and are unlikely to last. We’re confident that category growth will return to the 3% to 4% range over time.”

Wall Street had anticipated weaker performance from P&G, with the stock declining roughly 6% over the past half-year.

Evercore analyst Robert Ottenstein commented on the current challenges for consumer goods companies, noting, “The K-shaped economy is driving consumers to seek value in essentials, while still spending more on premium beauty products.”

Key Takeaways from the Earnings Report

• Total revenue: $22.2 billion, a 1% increase year-over-year, but below the $22.32 billion forecast
• Organic sales growth: Flat, compared to an expected 0.54% rise
  • Beauty segment: Organic sales up 4%, surpassing the 2.87% estimate
  • Grooming segment: No growth, missing the 2.42% projection
  • Healthcare segment: Organic sales up 3%, ahead of the 1.73% estimate
  • Fabric and home care: No growth, below the 1.2% expectation
  • Baby, feminine, and family care: Organic sales down 4%, worse than the anticipated 3.2% decline
• Gross margin: 51.2%, slightly under the 52.2% estimate
• Adjusted earnings per share: $1.88, matching last year and beating the $1.86 estimate

Outlook Remains Steady

• Full-year organic sales growth: Guidance maintained at 0% to 4% (consensus: 1.7%)
• Full-year earnings per share: Guidance reaffirmed at $6.83 to $7.09 (consensus: $6.97)