Summary
Procter & Gamble (PG) reported strong performance for the first quarter of fiscal year 2021, with net sales increasing by 9% year-over-year to $19.3 billion. This growth was driven by a 7% increase in unit volume, supported by a mid-teen increase in Fabric & Home Care, and double-digit growth in Health Care, demonstrating resilience and consumer demand for essential products. Net earnings attributable to P&G surged by 19% to $4.3 billion, translating to a 20% increase in diluted Earnings Per Share (EPS) to $1.63. The company highlighted the positive impact of the COVID-19 pandemic on demand for certain product categories, such as fabric, home cleaning, and hygiene products, while also noting some slowdowns in beauty and grooming categories due to economic conditions and consumer movement restrictions in specific regions. Operationally, P&G achieved significant gross margin expansion, up 170 basis points to 52.7%, benefiting from manufacturing cost savings and lower commodity costs. Selling, general, and administrative (SG&A) expenses as a percentage of sales decreased, indicating improved operational leverage. The company also reported robust operating cash flow of $4.7 billion and adjusted free cash flow of $4.1 billion, with a strong productivity of 95%. Management's outlook suggests continued focus on productivity and cost savings, with expectations for fiscal year 2021 restructuring costs to be within the historical ongoing range. The company also announced plans to retire approximately $2.3 billion of outstanding debt securities, underscoring a commitment to financial discipline.
Financial Highlights
52 data points| Revenue | $19.32B |
| Cost of Revenue | $9.14B |
| Gross Profit | $10.18B |
| SG&A Expenses | $4.89B |
| Operating Income | $5.28B |
| Interest Expense | $136.00M |
| Net Income | $4.28B |
| EPS (Basic) | $1.69 |
| EPS (Diluted) | $1.63 |
| Shares Outstanding (Basic) | 2.49B |
| Shares Outstanding (Diluted) | 2.63B |
Key Highlights
- 1Net sales increased by 9% to $19.3 billion, driven by a 7% increase in unit volume, with notable strength in Fabric & Home Care and Health Care segments.
- 2Net earnings attributable to P&G rose by 19% to $4.3 billion, with diluted EPS growing 20% to $1.63.
- 3Gross margin improved by 170 basis points to 52.7%, supported by manufacturing cost savings and lower commodity costs.
- 4Operating cash flow was strong at $4.7 billion, and adjusted free cash flow reached $4.1 billion with 95% productivity.
- 5The COVID-19 pandemic positively impacted demand for essential products like cleaning and hygiene items, while affecting beauty and grooming categories in certain regions.
- 6The company plans to reduce outstanding shares through repurchases of $7 to $9 billion in fiscal year 2021.
- 7P&G announced a plan to early retire approximately $2.3 billion of outstanding debt securities.