In the release of its financial results for the quarter, The Procter & Gamble Company announced it increased its core earnings per share by 5% to $1.06 for the July–September 2012 period. Diluted net earnings per share from continuing operations were $0.96, a decrease of 5% due to non-core charges of $0.10. The company’s organic sales grew 2% in the quarter, and net sales were $20.7 billion, a decrease of 4% versus the prior year period, including a negative 6% impact from foreign exchange. However, the company did continue to deliver broad-based organic sales growth, with four of its five business segments increasing versus the prior year.
P&G said it held or grew market share in businesses representing over 45% of sales in the July–September quarter, as measured on a constant currency value basis. In the U.S. market, P&G held or grew value share in businesses representing nearly 60% of sales.
“Our first quarter results put us on track to deliver our commitments for the fiscal year. Results were at the high end of expectations on the top line and ahead of plan on operating profit, earnings per share and cash,” said P&G chairman, president and CEO Bob McDonald. “We are continuing to focus on executing our growth and productivity strategy—maintaining momentum in developing markets, strengthening our core developed market business, building a strong innovation pipeline, and aggressively driving cost savings and productivity improvements. We’re confident that this strategy will enable P&G to generate superior levels of shareholder return in both the short- and long-term.”
For P&G’s beauty segment, the company recorded a volume decrease of 3% (down 5% with foreign exchange) while price increased 2%. Ultimately, the segment’s net sales were down 7%, with organic volume down 3% and organic sales down 2%.
In the salon professional and prestige beauty businesses, organic sales increased versus the prior year driven by strong innovation on the Wella, Dolce & Gabbana, and Gucci brands. All-in sales were down in both categories due to significant negative impact from foreign exchange. Hair care and beauty care sales were down on both an all-in and organic basis due to negative foreign exchange impacts and market share softness resulting from high levels of competitive activity.
For the grooming segment, P&G recorded a volume decrease of 1% (down 8% with foreign exchange) and a price increase of 3%. The segment also saw net sales decrease 7%, with organic volume growth flat but organic sales up 2%.
The shave care business saw organic sales increase versus the prior year as solid growth in developing markets behind Fusion ProGlide and Prestobarba innovation and market expansions were partially offset by market contraction in Western Europe. All-in shave care net sales were down due to foreign exchange impacts, and organic and all-in sales in grooming appliances were down versus prior year due to competitive activity and market contraction.
For the October–December 2012 quarter, P&G is estimating organic sales growth in the range of 1–3%, while foreign exchange is expected to reduce sales by 2%, resulting in all-in sales guidance in the range of down 1% to up 1% versus year ago.
For the 2013 fiscal year, the company is maintaining its organic sales growth guidance in the range of 2–4%. Foreign exchange is expected to reduce sales growth by 2-3%, resulting in guidance for all-in net sales growth of in-line to up 1% versus the prior year.