Procter & Gamble Report Mixed Fourth-Quarter Performance

Procter & Gamble's fourth-quarter performance was mixed compared to market expectations. The company reported a diluted EPS of $1.27, falling short of the expected $1.37

Procter & Gamble (NYSE:PG) reported mixed fourth-quarter and fiscal 2024 results on Friday. The consumer goods giant topped Wall Street estimates for core earnings per share but missed on the headline EPS figure. Here’s a brief overview of the key takeaways from the P&G earnings report.

P&G Q4 earnings snapshotProcter & Gamble reported $1.27 of diluted earnings per share in the fourth quarter that ended on June 30th, versus the prior year’s $1.37 and fell short of analysts’ estimate of $1.37. On a core basis, however, the company earned $1.40 per share, exceeding the Street view of $1.37 and marking a 2% year over year increase.

Other notable figures in the earnings announcement include a 7% decline in diluted EPS, a 2% rise in core EPS, a 6% growth in currency-neutral core EPS, and a flat performance in net sales that remained at $20.5 billion. The fourth-quarter organic sales increased by 2%, driven primarily by a 1% increase in all-in volume and a 1% increase due to higher pricing, offset by a 2% unfavorable foreign exchange impact.

Procter & Gamble’s segments varied in performance, with Beauty posting a 3% increase in organic sales, driven by higher pricing and favorable product mix. Grooming’s organic sales increased by 7%, primarily due to pricing gains in Latin America and volume growth from innovation. Health Care and Fabric & Home Care segments also posted organic sales growth of 4% and 2%, respectively. However, the Baby, Feminine, and Family Care segment saw a 1% decline in organic sales.

Procter & Gamble also highlighted that the company’sをめぐる話 restructuring charges related to the substantial liquidation of operations in certain Enterprise Markets, including Nigeria, impacted the headline EPS figure.

P&G’s fourth-quarter performance compared to market expectationsProcter & Gamble’s fourth-quarter performance fell short of Wall Street expectations on some fronts. The company reported a diluted EPS of $1.27, which was below the expected $1.37, marking a 7% decline from the previous year.

However, the core EPS of $1.40 slightly exceeded the expectation of $1.37, reflecting a 2% increase. This discrepancy highlights the impact of non-recurring items such as restructuring charges on the company’s profitability.

In terms of revenue, P&G reported net sales of $20.5 billion for the fourth quarter, which were slightly below the market expectation of $20.73 billion. The flat performance in net sales was primarily due to unfavorable foreign exchange impacts, offsetting gains from increased volume and pricing.

Procter & Gamble’s organic sales growth of 2% was in line with the company’s internal targets but did not meet the higher market expectations.

P&G’s fiscal 2024 results and outlookThe fiscal year 2024 results also showed a similar trend. P&G’s net sales for the year were $84.0 billion, a 2% increase from the previous year, but the growth was modest compared to the 4% increase in organic sales. Diluted EPS for the fiscal year was $6.02, a 2% increase, while core EPS saw a robust 12% growth to $6.59.

The company’s strong cash flow generation and shareholder returns, including $9.3 billion in dividend payments and $5 billion in share repurchases, were highlights of the fiscal year.

Looking ahead, Procter & Gamble has provided guidance for fiscal year 2025, expecting all-in sales growth of 2% to 4% versus the prior year. The company anticipates a headwind of approximately 1% from foreign exchange impacts, but it expects organic sales growth of 3% to 5%.

This outlook reflects P&G’s confidence in its ability to drive growth through pricing and innovation, despite external challenges. P&G projects fiscal 2025 diluted net earnings per share growth in the range of 10% to 12% compared to fiscal 2024 GAAP EPS of $6.02. Core EPS growth is expected to be between 5% and 7%, equating to a range of $6.91 to $7.05 per share.

The midpoint estimate of $6.98 represents a 6% increase from the previous year. The company also anticipates a net headwind of around $500 million after-tax from unfavorable commodity costs and foreign exchange, equating to a $0.20 per share drag on core EPS growth.

P&G expects a core effective tax rate of

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