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Net Sales Increase to $20.7 Billion for April–July Quarter for P&G
Posted: August 1, 2013
The Procter & Gamble Company reported fiscal year 2013 diluted net earnings per share from continuing operations of $3.86, up 24% versus the prior year. Core earnings per share were $4.05, an increase of 5% versus the prior year. Net sales were $84.2 billion, an increase of 1% including a negative two point impact from foreign exchange. Organic sales grew 3% for the fiscal year.
“The company met its objectives for the fourth quarter and fiscal year, and we will build on these results in fiscal 2014,” said chairman, president and CEO A.G. Lafley. “With an overriding focus on value creation, we will strengthen and accelerate productivity plans. We will continue to make choiceful investments in core brands, our biggest innovation opportunities, and in our core developed and most promising developing markets. In all we do, we will stay focused on winning with consumers, customers and shareholders.”
For its fiscal year 2013, results were in line with objectives P&G set at the beginning of the fiscal year. Organic sales were in line with initial guidance, with market share trends improving throughout the year. Unit volume growth contributed 2% to sales growth, and pricing added 1%.
Net sales increased 2% to $20.7 billion in the April–June quarter, including unfavorable foreign exchange of two percentage points. Organic sales grew 4%, including a unit volume increase of five percent. Geographic and category mix reduced net sales by one percentage point, while pricing was unchanged versus the prior year.
P&G's beauty segment net sales increased 1% driven by a four 4% increase in unit volume, partially offset by a negative two percentage point impact from foreign exchange and one percentage point of unfavorable product mix. Sales were down in hair care, as volume growth was more than offset by pricing adjustments to improve consumer value and unfavorable foreign exchange. In the personal beauty categories, sales were up high single digits behind strong, innovation-driven growth in personal cleansing products, cosmetics and deodorants. Sales were down versus prior year in skin care due to high levels of competitive promotional activity. Prestige sales grew mid-single digits driven by new innovation. Also, the beauty segment's net earnings growth drivers were a lower effective tax rate and lower SG&A costs, partially offset by a lower gross margin.
For its grooming segment, P&G saw blade and razor net sales increase versus the prior year driven primarily by growth in developing regions due to innovation and customer inventory increases, partially offset by a decrease in developed regions driven by initiative timing and market contraction in Southern Europe. Net sales in appliances declined due to the divestiture of the household appliances business, high levels of competitive activity, foreign exchange, and comparison against a base period that included initiative activity. Grooming segment net earnings increased, as higher pricing and manufacturing and overhead productivity savings were partially offset by an increase in marketing spending and foreign exchange.
For fiscal year 2014, P&G expects organic sales growth in the range of 3–4 percent compared to underlying global market growth of about 3.5%. All-in sales growth is forecast in the range of 1–2%, including a negative foreign exchange impact of approximately 2%.