NEW YORK -- Procter & Gamble reported better-than-expected fourth-quarter profits and revenue, showing that the appetite for established brands like Crest toothpaste, Tide detergent and Charmin toilet paper is still strong even as the consumer products company pushes up prices.
P&G increased prices by about 7% across various brands from the same period last year, less than the 10% increase in third quarter. Global volume fell 1% in the quarter, however, still an improvement over a 3% drop in volume during the third quarter, and a 6% drop in the second quarter.
During a call with analysts Friday, Chairman and CEO Jon Moeller said higher prices are tied to company innovations and aren't going away.
Examples include Cruiser 360 diapers, made for babies that move around a lot. Sales have increased 33% over the past 12 months, according to Andre Schulten, the company’s chief financial officer. And a detox body wash sold in China called Safeguard goes for twice the market average price. Sales have almost doubled in the past year.
“When you have a strong innovation program, it compels consumers to try even better performing products,” Moeller said.
Pricing has been a boost to sales growth in nearly all of P&G's past 51 quarters, Moeller said.
The easing of volume declines may be encouraging news for P&G and other producers after recent evidence of a pushback by shoppers to seemingly relentless price hikes coming from a broad spectrum of retailers and companies the make products for them.
Conagra Brands, which makes Slim Jim beef jerky, Duncan Hines cake mix and more, said this month that smaller price increases have not translated to higher sales volume. The company raised prices 15% in the quarter before that and it didn't dent demand.
Also this month, PepsiCo said higher prices lifted the company’s revenue in the second quarter but snack food volumes fell 3% in the April-June period, while beverage volumes dropped 1%. The company said that price increases could start to moderate in the second half of this year.
Overall inflation continues to slow and on Friday, the U.S. reported that the consumer price index, which is followed closely because it accounts for changes in how people shop when inflation jumps, rose in June at the slowest pace in more than two years.
Procter & Gamble Co., based in Cincinnati, reported net income of $3.39 billion, or $1.37 per share, in the quarter ended June 30. That compares with $3.06 billion, or $1.21 per share, in the year-ago quarter.
Sales rose 5% to $20.6 billion from $19.51 billion in the quarter.
Analysts were expecting $1.32 per share on sales of $20.01 billion, according to FactSet.
P&G expects fiscal 2024 sales growth in the range of 3% to 4% versus the prior year. The company expects organic sales growth, which excludes deals and currency moves, to be in the range of 4% to 5%.
P&G expects net earnings per share growth in the range of 6% to 9% for the current year. This outlook equates to a range of $6.25 to $6.43 per share, with a mid-point estimate of $6.34, or an increase of 7.5%. Analysts were expecting $6.37 per share.
Shares rose more than 3% Friday.
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