P&G says ‘consumer demand is stabilising despite higher prices’

BLOOMBERG

Procter & Gamble Co (P&G) raised its sales projection for the fiscal year ending in June, citing higher prices and a slight increase in demand for some of its products. The shares rose the most in three years.
The maker of Bounty paper towels and Herbal Essences shampoo said organic sales, which exclude fluctuations, should grow 6% from the prior year, up from its previous forecast of as much as 5%. Yet P&G didn’t budge on its profit outlook despite easing costs, reiterating its expectation that earnings per share will be at the lower end of a $5.81 to $6.04 range.
The outlook and quarterly results outpaced expectations in key metrics, highlighting that the US economic slowdown appears to be relatively contained even as elevated inflation restricts household spending. The Head & Shoulders shampoo manufacturer said total unit sales fell 3% in the quarter ended in March. That decline is less than what analysts expected and smaller than the one P&G posted the previous quarter. The volume of products sold increased in the US, Chief Financial Officer Andre Schulten said.
“Our volumes are starting to stabilise, which is what we wanted to see,” Schulten said, adding that because of high labour and commodity costs, “we are not in a position to raise the bottom-line forecast at this point.”
Excluding Russia, the volume decline would have amounted to 2%, Schulten said on a call with reporters. Rebounding consumption in China following its reopening from strict Covid-19 lockdowns also helped limit the unit sales decline.