P&G raises outlook as lockdown shopping lifts sales
Procter & Gamble (P&G) raised its outlook after posting its best organic sales growth since 2005 amid a boom in at-home consumption of toilet paper and cleaning supplies.
The maker of Tide detergent and Dawn dish soap said organic sales growth, which strips out some items such as currency swings, rose 9% in the quarter ended September 30. Sales grew in each of P&G’s business units, led by the fabric and home-care segment, which has spiked as consumers do more dishes, laundry and cleaning at home.
“It’s a continuation of strong momentum. This isn’t a flash in a pan,” CFO Jon Moeller said. “I don’t see any reason that we shouldn’t be able to sustain strong results.”
The performance signals consumers are sticking to behaviours they have adopted during the pandemic. As long as many remain homebound in its North American market, a slowdown appears unlikely, and Moeller said he expected strength in fabric and home-care sales to persist.
Heightened awareness of wellness and digestive health are also helping to boost P&G’s health unit, which sells Oral-B toothbrushes and Metamucil fibre supplements.
The Cincinnati-based company sees organic revenue growing 4% to 5% in fiscal 2021, an increase from the previous outlook of 2% to 4%. It sees earnings per share rising in the range of 4%-9%.
Moeller said nothing “short of a broadly available vaccine or therapeutic” for Covid-19 would be expected to change consumption levels.
The company’s optimism comes as it overcomes weak spots from past quarters — such as the grooming segment, which grew the most since 2016. The company said sales were buoyed by higher demand for shaving and styling products and higher prices.
In the beauty segment, sales of SK-II skin creams and facial treatments rose 20% in China, where Moeller said “things are pretty much back to normal”.
P&G shares have risen 14% this year, more than double the gain of the S&P 500. The shares rose 1.5% in New York.
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