Procter & Gamble posted slightly higher revenue in its fiscal second quarter as higher prices helped offset a decline in volumes. The company said it’s seen a difficult operating environment in the beginning of the fiscal year but that results would likely improve in the back half as its product-innovation efforts take hold.
“It’s been a challenging start to the fiscal year with softer consumer markets, aggressive competition and a dynamic geopolitical landscape. We expect stronger results in the second half,” said Chief Financial Officer Andre Schulten in the company’s earnings call on Thursday.
The maker of Crest toothpaste and Pantene shampoo cut its earnings outlook for the fiscal year, citing higher restructuring charges. It does expect commodity costs to ease a bit and backed its prior forecast for adjusted earnings.
Shares ticked up 2.3% to $149.34.
The company posted a profit of $4.32 billion, or $1.78 a share, for the fiscal second quarter ended Dec. 31, compared with $4.63 billion, or $1.88 a share, a year earlier. The decrease was primarily driven by higher restructuring charges, it said.
Adjusted earnings per share were $1.88, ahead of estimates of $1.86, according to analysts polled by FactSet.
Revenue ticked up 1% to $22.21 billion, just short of analyst estimates of $22.3 billion.
Organic sales, a figure that strips out the impact of acquisitions, divestitures and currency effects, were flat, as a decline in unit volume offset higher pricing. The metric rose 4% in P&G’s beauty segment and 3% in its healthcare unit, and retreated 4% in its baby, feminine and family-care business.
Looking ahead, P&G continues to forecast sales growth of 1% to 5% and organic sales growth of flat to up 4% for the fiscal year, which ends June 30.
The consumer-products company now expects fiscal-year net earnings per share to rise between 1% and 6%, compared with a prior forecast of 3%-to-9% growth. The updated guidance reflects higher noncore restructuring charges in the year, P&G said.
Adjusted earnings for the year are still expected to be flat to up 4%.
P&G continues to forecast for tariffs to add about $400 million to its fiscal-year costs, and it now expects commodity costs to be neutral, compared with a prior projection of $100 million. Both estimates are after tax.
