(Reuters) – Procter & Gamble Co (PG.N) raised its full-year sales forecast and beat Wall Street estimates for quarterly revenue and profit on Wednesday, driven by price increases and robust demand for detergent and premium skin care brands.
FILE PHOTO: The logo of Procter & Gamble Co. is displayed on a screen on the floor of the New York Stock Exchange in New York, U.S., June 27, 2018. REUTERS/Brendan McDermid/File Photo
Shares of the world’s largest consumer goods maker rose 4.2 percent to $94.25 in early trading.
P&G, like other traditional consumer-goods companies, has been facing a string of challenges, including stiff competition from supermarket brands and direct-to-consumer start-ups, as well as higher commodity costs.
To counter this, P&G has been launching newer products in its beauty and fabric care business, while also raising prices.
Core sales in the beauty business rose 8 percent, driven by strong demand for its premium SK-II and Olay skin care brands, while feminine care business, which includes brands such as Tampax and Whisper, also witnessed high single-digit growth.
Overall core sales in the second quarter, which exclude items like acquisitions and foreign currency impact, rose 4 percent. Analysts on average were expecting growth of 2.40 percent, according to IBES data from Refinitiv.
Fabric and home care business, which includes brands such as Tide and Ariel, rose 2 percent to $5.56 billion. The business is P&G’s biggest contributor to sales.
The company said it now expects full-year sales growth to range between a decline of 1 percent and a rise of 1 percent. The top end of its full-year forecast for core sales was also raised by 1 percent.
“We delivered strong organic sales in the second quarter, building on our first quarter momentum, which enables us to increase our outlook for the year,” said Chief Executive Officer David Taylor said.
In contrast, industry peer Kimberly-Clark Corp (KMB.N) said on Wednesday that its expects the environment in 2019 to remain challenging, while its quarterly profit misses expectations.
P&G said net income attributable to the company rose 28 percent to $3.19 billion in the second quarter ended Dec. 31.
Excluding items, the company earned $1.25 per share, beating analysts’ estimate of $1.21 per share.
Net sales rose marginally to $17.44 billion, beating analysts’ average estimate of $17.15 billion, according to IBES data from Refinitiv.
Reporting by Aishwarya Venugopal in Bengaluru; Editing by Anil D’Silva