Marketers Sponsored by
The Procter & Gamble Company increased core earnings per share by 12% to $1.22 for the October–December 2012 quarter. Organic sales grew 3% for the quarter as well, and net sales were $22.2 billion, an increase of 2% versus the prior year period including a -1% impact from foreign exchange. Overall, the company delivered broad-based organic sales growth, with all business segments increasing organic sales by 2% or more versus the prior year.
P&G also held or grew market share in businesses representing nearly 50% of sales in the October–December 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 second quarter results were at the high end of our expectations on the top-line and well ahead of forecast on operating profit, earnings per share and cash flow,” said P&G chairman, president and CEO McDonald. “Global market share trends improved as we continued to implement our growth strategy and made very good progress against our productivity and cost savings goals. Our strong first half results have enabled us to raise our sales, earnings and share repurchase outlook for the fiscal year, while we strengthen investments in our innovation and marketing programs.”
For the company’s beauty segment, the majority of the businesses increased net sales versus the prior year driven by innovation and higher pricing. Overall, net sales increased 1%. Net sales decreased in skin care due to competitive activity while net sales decreased in salon professional due to the negative impact from foreign exchange and market softness. Increased net earnings were driven by higher pricing and productivity savings in cost of goods and overheads.
For its grooming segment, P&G reported a 4% drop in net sales for the quarter. Blades and razors net sales increased versus the prior year due to higher pricing and growth in the U.S. driven by strengthened marketing and in-store plans and were partially offset by the negative impact from foreign exchange. Organic sales in appliances increased behind favorable product mix and price increases, but all-in sales for the segment decreased due to the divestiture of the household appliances business and negative foreign exchange. Net earnings were in-line with prior year as higher pricing and productivity savings were offset by the decrease in net sales and higher commodity costs.
The company is increasing its organic sales growth guidance for fiscal 2013 to a range of 3–4% for the fiscal year from a previous range of 2–4%. Foreign exchange is expected to reduce sales growth by 2%, resulting in guidance for all-in net sales growth of up 1–2% versus the prior year. The company also increased its outlook for share repurchase to $5–6 billion, up from a prior range of $4–6 billion.
Additionally, P&G is estimating net and organic sales growth in the range of 3–4% for the January–March 2013 quarter. Foreign exchange is expected to be neutral to sales growth.