Procter & Gamble (PG) earnings Q2 2023

In this photo illustration a Procter and Gamble logo seen displayed on a smartphone with stock market percentages in the background.

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Procter & Gamble reported year-over-year declines in revenue and profit on Thursday, as higher prices struggled to offset declining sales volumes.

Shares of P&G fell about 1% in premarket trading.

Here’s how P&G performed in its fiscal second quarter of 2023 compared with what Wall Street anticipated, based on an average of analyst’s estimates compiled by Refinitiv:

  • Adjusted earnings per share: $1.59 versus an expected $1.59
  • Total revenue: $20.77 billion versus expected $20.73 billion.

For the three-month period ended Dec. 31, the company reported net income of $3.9 billion, or $1.59 per share, excluding items, down from $4.22 billion, or $1.66 per share, a year earlier.

Net sales fell 1% to $20.77 billion, topping analyst’s projections of $20.73 billion.

The company’s organic revenue, which excludes the impact of foreign currency, acquisitions and divestitures, increased 5% during the fiscal second quarter. That increase was a result of higher pricing, which outweighed shrinking consumer demand.

The Cincinnati-based consumer goods giant, which owns brands like Crest toothpaste, Tide laundry detergent, and Pampers diapers, warned in its first quarter report of a $3.9 billion hit to its fiscal year 2023 due to “unfavorable” foreign exchange rates and pricier raw materials, commodities and freight. As a result, the company lowered its guidance, despite posting a solid first quarter.

But so far this year, those headwinds have started to ease. Freight, commodities and raw material costs have all begun to decline as the supply chain improves. The dollar has also weakened against other major currencies, balancing out a foreign exchange rate that was eating at revenue.

The company lifted its outlook for 2023 sales growth to a range of 4% to 5% from a prior range of 3% to 5%. The company lowered its estimated impact of foreign exchange to 5% from 6%.

All of the company’s divisions reported declining sales volume in the quarter, despite seeing increases in organic sales as a result of higher pricing. Its grooming division, which houses brands like Gillette and The Art of Shaving and has historically underperformed for the company, reported no sales growth at all — its volume declines completely cancelled out its higher prices.

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