Summary
Procter & Gamble's fiscal second quarter ended December 30, 2022, saw a slight dip in net sales, down 1% to $20.8 billion, primarily due to unfavorable foreign exchange rates and a decline in unit volume, which were partially offset by increased pricing. Despite the top-line pressure, the company demonstrated strong pricing power and effective cost management, leading to a 7% decrease in operating income and net earnings, largely driven by cost pressures from commodities and input materials, as well as negative foreign exchange impacts. Diluted Earnings Per Share (EPS) also saw a decline of 4% to $1.59. However, organic sales, excluding foreign exchange, grew by 5%, indicating underlying business resilience. For the first six months of the fiscal year, net sales remained flat at $41.4 billion, with organic sales growing a more robust 6%. Net earnings and diluted EPS experienced a decline of 5% and 3%, respectively, reflecting similar pressures as the quarterly results. The company's commitment to returning capital to shareholders remains evident, with significant treasury stock purchases and dividend payments. Management continues to navigate a challenging macroeconomic environment characterized by inflation, currency fluctuations, and geopolitical instability.
Financial Highlights
53 data points| Revenue | $20.77B |
| Cost of Revenue | $10.90B |
| Gross Profit | $9.88B |
| SG&A Expenses | $5.09B |
| Operating Income | $4.79B |
| Interest Expense | $171.00M |
| Net Income | $3.93B |
| EPS (Basic) | $1.63 |
| EPS (Diluted) | $1.59 |
| Shares Outstanding (Basic) | 2.37B |
| Shares Outstanding (Diluted) | 2.48B |
Key Highlights
- 1Net sales for the quarter decreased by 1% to $20.8 billion, driven by unfavorable foreign exchange and lower unit volume, though offset by higher pricing.
- 2Organic sales, a key measure excluding currency impacts, grew by 5% for the quarter and 6% for the six-month period, demonstrating underlying business strength.
- 3Gross margin declined by 160 basis points for both the quarter and the six-month period, primarily due to increased commodity and input material costs, and unfavorable product mix, partially offset by higher pricing.
- 4Net earnings attributable to Procter & Gamble decreased by 7% for the quarter and 6% for the six-month period, impacted by reduced operating income and foreign exchange headwinds.
- 5Diluted Earnings Per Share (EPS) declined by 4% for the quarter to $1.59 and by 3% for the six-month period to $3.16.
- 6The company returned significant capital to shareholders through $6.0 billion in treasury stock purchases and $4.5 billion in dividends for the six-month period.
- 7The Grooming segment experienced a notable sales decline of 9% for the quarter, while Health Care and Fabric & Home Care segments showed modest sales growth.