Summary
Procter & Gamble (PG) reported its first-quarter fiscal year 2023 results, showing a modest 1% increase in net sales to $20.6 billion, driven by a significant 9% increase in pricing and a 1% favorable mix, which more than offset a 3% decrease in unit volume and a 6% headwind from foreign exchange. Despite the top-line growth, net earnings attributable to P&G decreased by 4% to $3.9 billion, resulting in a 2% decline in diluted EPS to $1.57. This earnings decline was primarily attributed to a lower operating margin, impacted by a substantial 510 basis-point increase in commodity and input material costs, alongside other cost pressures. While pricing actions and productivity savings provided some offset, they were not enough to fully counter the rising costs. The company continues to navigate a challenging economic environment marked by inflation, foreign exchange volatility, and supply chain disruptions, with specific impacts noted from the Russia-Ukraine war.
Financial Highlights
52 data points| Revenue | $20.61B |
| Cost of Revenue | $10.85B |
| Gross Profit | $9.77B |
| SG&A Expenses | $4.83B |
| Operating Income | $4.94B |
| Interest Expense | $123.00M |
| Net Income | $3.94B |
| EPS (Basic) | $1.62 |
| EPS (Diluted) | $1.57 |
| Shares Outstanding (Basic) | 2.39B |
| Shares Outstanding (Diluted) | 2.50B |
Key Highlights
- 1Net sales increased 1% to $20.6 billion, driven by a 9% price increase and 1% favorable mix, despite a 3% volume decline and 6% foreign exchange headwind.
- 2Diluted EPS decreased 2% to $1.57, impacted by a decline in net earnings.
- 3Gross margin declined 160 basis points to 47.4% primarily due to a 510 basis-point increase in commodity and input material costs.
- 4Organic sales grew 7%, indicating underlying demand strength that was masked by foreign exchange and volume decreases.
- 5The Health Care segment showed robust growth with net sales up 3% and net earnings up 17%, driven by strong performance in Personal Health Care.
- 6The company continued its share repurchase program, buying back $4.0 billion in treasury stock during the quarter.
- 7Significant risks related to foreign currency fluctuations, inflation, commodity costs, and geopolitical events like the Russia-Ukraine war continue to impact the business.