Summary
Procter & Gamble's (PG) fiscal second quarter 2024 report reveals a 3% increase in net sales to $21.4 billion, driven by a 4% increase in pricing, partially offset by a 1% unfavorable foreign exchange impact. While overall net sales grew, diluted earnings per share (EPS) saw a 12% decrease to $1.40, primarily impacted by a significant $1.3 billion (pre-tax) impairment charge on the Gillette intangible asset. However, the company reported strong operational performance, with gross margin improving by 520 basis points due to manufacturing productivity, lower commodity costs, and higher pricing. Furthermore, Core EPS, which excludes the impairment charge and incremental restructuring costs, increased by a robust 16% to $1.84, highlighting the underlying strength of the business. For the first six months of the fiscal year, net sales increased by 5% to $43.3 billion, and net earnings rose by 2% to $8.0 billion. Core EPS for the six-month period surged by 16% to $3.66. The company also demonstrated strong cash flow generation, with operating cash flow at $10.0 billion and adjusted free cash flow at $8.7 billion for the first half of the fiscal year, resulting in an impressive adjusted free cash flow productivity of 96%. The company continues its share repurchase program, returning capital to shareholders.
Financial Highlights
54 data points| Revenue | $21.44B |
| Cost of Revenue | $10.14B |
| Gross Profit | $11.30B |
| SG&A Expenses | $5.52B |
| Operating Income | $4.43B |
| Interest Expense | $248.00M |
| Net Income | $3.47B |
| EPS (Basic) | $1.44 |
| EPS (Diluted) | $1.40 |
| Shares Outstanding (Basic) | 2.36B |
| Shares Outstanding (Diluted) | 2.47B |
Key Highlights
- 1Net sales increased by 3% to $21.4 billion for the quarter, driven by a 4% price increase, though unit volume was flat.
- 2Diluted EPS decreased by 12% to $1.40 due to a significant $1.3 billion pre-tax impairment charge on the Gillette intangible asset.
- 3Core EPS (excluding impairment and restructuring charges) increased by 16% to $1.84 for the quarter, indicating underlying business strength.
- 4Gross margin improved by 520 basis points to 52.7% driven by manufacturing productivity, lower commodity costs, and higher pricing.
- 5For the six months ended December 31, 2023, net sales increased 5% to $43.3 billion and net earnings increased 2% to $8.0 billion.
- 6Operating cash flow for the six months was $10.0 billion, with adjusted free cash flow at $8.7 billion and productivity at 96%.