Procter & Gamble Co. (PG), a leader in consumer goods, revealed on Wednesday a 34% rise in profit for the second quarter, attributed mainly to a better operating margin and a modest 2% increase in sales. Both core earnings per share and quarterly sales surpassed analysts’ expectations. The company reaffirmed its full-year guidance for 2025.
In the NYSE pre-market trading, PG shares rose to $167.13, marking an increase of $5.41, or 3.35%. Jon Moeller, the Chairman, President, and CEO, commented, "The P&G team achieved acceleration in organic sales growth, core EPS growth, and delivered a robust cash return to shareholders in the second quarter."
For this quarter, net earnings attributed to P&G rose to $4.63 billion or $1.88 per share, up from $3.47 billion or $1.40 per share in the previous year. Core earnings were reported at $1.84 per share, while analysts had anticipated $1.60 per share, typically excluding special items.
Quarterly net sales climbed 2% to $21.88 billion compared to $21.44 billion last year, surpassing the consensus analysts' estimate of $20.63 billion. When adjusting for variables such as foreign exchange, acquisitions, and divestitures, organic sales saw a 3% increase, driven by a 2% rise in organic volume and 1% from a favorable geographic mix. Pricing remained neutral for sales growth in this period.
Specifically, sales in the Baby, Feminine and Family Care segment increased by 3%, Health Care by 2%, Fabric & Home Care by 2%, while Grooming saw a 1% rise. The Beauty segment remained unchanged. Organic sales witnessed growth across all five segments.
The operating margin jumped by 550 basis points, primarily due to gross productivity savings of 260 basis points. Moeller added, "Our first-half results position us to meet all key financial metrics within our guidance for the fiscal year."
For fiscal 2025, P&G expects earnings per share to grow between 10% and 12% from the fiscal 2024 base of $6.02 per share, projecting earnings between $6.62 and $6.74 per share. Core net earnings per share growth is anticipated in the 5% to 7% range from the 2024 base of $6.59 per share, implying an adjusted earning range of $6.91 to $7.05 per share.
The fiscal 2025 sales growth is maintained to range from 2% to 4% overall and 3% to 5% organically. The anticipated earnings per share stands at $6.93, with a revenue growth target of 1.42% to reach $85.23 billion for the year, often leaving out special items.
P&G remains committed to achieving a 90% adjusted free cash flow productivity and plans to distribute approximately $10 billion in dividends while repurchasing $6 billion to $7 billion in common shares throughout fiscal 2025.
