10-QPeriod: Q3 FY2019

PROCTER & GAMBLE Co Quarterly Report for Q3 Ended Mar 31, 2019

Filed April 23, 2019For Securities:PG

Summary

Procter & Gamble Co. (PG) reported a solid third quarter for fiscal year 2019, with net sales increasing by 1% to $16.5 billion and net earnings attributable to Procter & Gamble rising by 9% to $2.7 billion ($1.04 per diluted share). For the nine-month period, net sales grew 1% to $50.6 billion, and net earnings attributable to Procter & Gamble increased by 16% to $9.1 billion ($3.48 per diluted share). The company demonstrated strong organic sales growth of 5% in the quarter and 4% year-to-date, driven by volume increases across several key segments, including Health Care, Fabric & Home Care, and Beauty. Management highlighted effective cost management and productivity savings as key contributors to the improved profitability. The company also continued its commitment to returning capital to shareholders through dividends and share repurchases, with approximately $12.9 million shares repurchased in the quarter.

Financial Highlights

53 data points
Beta

Revenue

$16.46B

48.8% Gross Margin

Net Income

$2.75B

16.7% Net Margin

EPS (Diluted)

$1.04

Total Assets

$121.67B

Cash & Equivalents

$2.74B

Free Cash Flow

$2.77B

Financial Statements
Beta
Revenue$16.46B
Cost of Revenue$8.43B
Gross Profit$8.04B
SG&A Expenses$4.81B
Operating Income$3.23B
Interest Expense$131.00M
Net Income$2.75B
EPS (Basic)$1.07
EPS (Diluted)$1.04
Shares Outstanding (Basic)2.51B
Shares Outstanding (Diluted)2.64B

Key Highlights

  • 1Net sales for the third quarter increased 1% to $16.5 billion, with organic sales up 5%.
  • 2Diluted EPS for the quarter was $1.04, a 9% increase year-over-year.
  • 3For the nine-month period, net sales were $50.6 billion, up 1%, with organic sales up 4%.
  • 4Net earnings attributable to P&G increased 16% year-to-date to $9.1 billion.
  • 5Health Care, Fabric & Home Care, and Beauty segments showed positive net sales growth, with Health Care particularly strong with a 9% increase in net sales for the quarter.
  • 6The company generated $11.1 billion in cash from operating activities for the nine-month period, demonstrating strong operational cash flow.
  • 7Share repurchases continued, with approximately 12.9 million shares bought back in the quarter.

Frequently Asked Questions

For the third quarter of fiscal year 2019, Procter & Gamble reported a 1% increase in net sales to $16.5 billion and a 9% increase in net earnings attributable to P&G to $2.7 billion, or $1.04 per diluted share. Year-to-date, net sales increased 1% to $50.6 billion, and net earnings attributable to P&G rose 16% to $9.1 billion, or $3.48 per diluted share.

The Health Care segment showed robust performance with a 9% increase in net sales for the quarter, driven by volume growth and a 5% organic sales increase. Fabric & Home Care also saw a 2% increase in net sales, supported by volume growth and organic sales growth of 7%. The Beauty segment reported a 4% increase in net sales, with organic sales up 9%.

Procter & Gamble emphasized productivity savings and cost management. Gross margin improved in the quarter due to manufacturing cost savings projects and positive pricing impacts, partially offset by higher commodity costs and unfavorable foreign exchange. SG&A as a percentage of net sales decreased year-to-date due to reductions in marketing spending and productivity savings, although overhead costs and other operating costs saw some increases.

The company continues to return capital to shareholders through dividends and share repurchases. For the quarter, P&G repurchased approximately 12.9 million shares. Year-to-date, the company generated strong operating cash flow of $11.1 billion, supporting these capital return initiatives.