The Procter & Gamble Company increased core earnings per share by 5% to $0.99 for the January–March 2013 quarter. Organic sales grew 3%, and net sales were $20.6 billion, an increase of 2% versus the prior year period including a negative 1% impact from foreign exchange.
P&G held or grew market share in businesses representing over 50% of sales in this January - March quarter, as measured on a constant currency value basis. In the U.S. market, P&G held or grew value share in businesses representing two-thirds of sales.
“We delivered another quarter of steady progress,” said chairman, president and CEO Bob McDonald. “Top-line growth was in line with our expectations. Market shares improved broadly. Strong cost savings enabled us to exceed our outlook on the bottom line. We increased our dividend earlier this month, and we are now projecting to repurchase $6 billion in stock, which is at the high end of our estimated range. We expect further top-line improvement in the fourth quarter, driven by innovation and portfolio expansion, enabled by continued productivity improvement.”
For its beauty segment, P&G saw 1% decrease in volume and a 1% increase in price, with a 2% decrease in net sales. Organic volume was down 1%, as was organic sales. Net sales decreased for the company in the hair care and skin care divisions in a period of heavy competitive product and promotional activity. Organic sales increased in its salon professional division, driven by strong innovation performance, partially offset by market contraction. Beauty segment net earnings growth was driven by higher pricing, manufacturing savings and a lower effective tax rate.
For the grooming segment, P&G recorded a volume drop of 2% and a price increase of 3%, with a 2% loss in net sales. Organic volume was steady, and organic sales grew 2%. Blades and razors net sales increased versus the prior year driven primarily by innovation in the U.S. and pricing and product mix improvement in developing regions. Net sales in appliances decreased due to market contraction, competitive activity and customer inventory adjustments. All-in sales for the segment decreased due to the divestiture of the household appliances business and negative foreign exchange. Grooming segment net earnings increased due to higher pricing and overhead productivity savings, partially offset by an increase in marketing spending.
P&G is maintaining its organic sales growth guidance of 3–4% for the fiscal year. Foreign exchange is expected to reduce sales growth by 2%, resulting in guidance for all-in net sales growth of 1–2% versus the prior year. For the April–June 2013 quarter, P&G is estimating organic sales growth in the range of 3–4%. Foreign exchange is expected to decrease net sales growth by 2%, resulting in net sales growth of 1–2% versus the prior year period.