MW P&G didn't raise prices for first time in 6 years, and Q2 earnings still beat

By Tomi Kilgore

Shares of Procter & Gamble Co. were headed for their best day in five months in early Wednesday trading, after the consumer products giant's fiscal second-quarter results beat expectations, amid strength in its baby, feminine and family care business.

The parent of household brands including Tide, Pampers, Gillette and Crest, which beat net sales expectations for the first time in five quarters, even as prices didn't rise for the first time in more than six years. The company also maintained its full-year financial guidance.

The stock $(PG)$ surged 3.3% in morning trading, which puts it on track for the biggest one-day gain since the 4.1% jump on Jan. 23, 2024.

Helping fuel the sales beat was a 1% increase in volume form a year ago, amid particular strength in baby, feminine and family care. Grooming and fabric and home care products also saw volume increases, while health care was flat and beauty saw some weakness.

The volume growth was solely a result of a favorable geographic sales mix, as prices were flat. That was the first time prices didn't rise since the fiscal first-quarter of 2019, when prices were also flat.

Net sales for the quarter to Dec. 31 rose 2.1% to $21.88 billion, above the FactSet consensus of $21.54 billion.

Within baby, feminine and family care, volume rose 4% and revenue rose 3% to $5.3 billion, as strength in family and feminine care offset weakness in baby care.

The weakness in beauty was due to declines in skin care volume and sales, which offset increases in hair and personal care.

Net earnings rose to $4.63 billion, or $1.88 a share, from $3.47 billion, or $1.40 a share.

Core earnings per share, which excludes nonrecurring items, rose to $1.88 from $1.84 and topped the FactSet consensus of $1.86. That marked the 10th straight quarter of bottom-line beats.

The company said it still expects fiscal 2025 sales to be 2% to 4% above the previous year, and affirmed the core EPS growth guidance of 5% to 7%.

Separately, the company said it returned more than $4.9 billion to shareholders during the latest quarter, including $2.5 billion through share repurchases.

The company continues to expect full-year shareholder returns of about $16 billion to $17 billion, including $6 billion to $7 billion in stock buybacks.

The stock has slipped 1.6% over the past three months, while the Dow Jones Industrial Average DJIA, of which the stock is a component, has tacked on 2.8%.

-Tomi Kilgore

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January 22, 2025 09:44 ET (14:44 GMT)

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