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Key Takeaways
- Procter & Gamble (P&G) is expected to enact its smallest quarterly price hikes for products since the first quarter of 2022, according to analysts.
- Backed by growth in sales of home care and healthcare products, analysts expect P&G to post higher quarterly revenue.
- So far in 2024, shares of P&G are outperforming both the Dow Jones Industrial Average and the consumer staples sector.
While Procter & Gamble (PG) is expected to continue to report higher revenue when it releases quarterly earnings on Friday, analysts are anticipating that the consumer products maker will slow its price increases.
Analysts expect P&G to report $20.45 billion in revenue for its 2024 fiscal third quarter ended in March, 1.9% better than the same quarter in the year prior, according to data compiled by Visible Alpha. It would be the lowest revenue growth for the company in the past five quarters.
The Tide maker’s anticipated adjusted net income of $3.46 billion is predicted to be 1.8% above its first-quarter 2023 figure of $3.40 billion.
| Analyst Estimates for Q3 2024 | Q2 2024 | Q3 2023 | |
|---|---|---|---|
| Revenue | $20.45B | $21.44B | $20.07B |
| Adjusted Earnings Per Share | $1.41 | $1.84 | $1.37 |
| Adjusted Net Income | $3.46B | $4.53B | $3.40B |
Key Metric: Prices
Procter & Gamble rode higher prices to increased revenue in its December quarter. But the upcoming earnings report could show the lowest price increases by the consumer goods seller since the first quarter of fiscal 2022, with analysts forecasting that P&G will hike prices by 2.75% in the quarter.
It could also be the first quarter in two years where the consumer giant reports positive annual growth in sales volumes, with expectations for a 0.35% increase.
Business Spotlight
Procter & Gamble’s report comes after it detailed a $1.3 billion impairment charge for its subsidiary razor business Gillette, forcing the company to reduce its 2024 full-year guidance for earnings per share (EPS). However, the company said it was able to maintain its forecasts for 2024 revenue, and it announced earlier this month that it would boost its quarterly dividend by 7%.
“We delivered strong results in the second quarter, enabling us to raise our core EPS growth guidance and maintain our top-line outlook for the fiscal year,” Procter & Gamble CEO Jon Moeller said after last quarter’s results.
Analysts expect P&G to report its largest gains from its biggest segment, with revenue from fabric and home care expected to jump about 3.6% year-over-year, while its healthcare sales are also expected to increase across the same period. After beauty and personal care products helped pace P&G’s sales in fiscal 2023, revenue from that segment is expected to ease about 1%.
A component of the Dow Jones Industrial Average (DJIA), P&G has had a good start to the year, with its shares up about 6.8% so far in 2024 as of Tuesday, compared with a DJIA that has started the year flat. It’s also outperforming the SPDR Consumer Staples Select Sector (XLP) exchange traded fund (ETF), which also is flat so far this year.