P&G's First-Quarter Earnings

P&G's First-Quarter Earnings

almost 4 years ago2 mins

Mentioned in story

Consumer goods giant Procter & Gamble (P&G) – the maker of Charmin toilet paper – announced a higher-than-expected quarterly profit on Friday, and relieved investors really seemed to give a... hoot 🧻

What does this mean?

As you’d probably expect given consumers’ panicked stockpiling ahead of coronavirus-driven lockdowns, P&G’s healthcare, home care, and family care items proved incredibly popular last quarter: it sold about 8% more of them than the same time last year. And while the company fell just short of investors’ (arguably over-optimistic) revenue expectations, it did manage to deliver a prediction-beating profit thanks to the high profit margins of its in-vogue products.

Daily Brief Image

What’s more, with one quarter left in P&G’s financial year (it thumbs its nose at the Gregorian calendar), the consumer products giant was able to do something most others couldn't: maintain its profit forecast for the remainder of its year. Hallelujah 🙌

Why should I care?

Stocks in so-called “defensive” industries – like consumer staples – have been recommended by analysts and favored by investors lately, since their everyday essentials attract buyers no matter the economic weather. And those investors were rewarded: P&G announced a 6% increase to its dividend and on Friday said it might keep repurchasing its shares. So far the company’s bought back $7.4 billion of stock – and it’s said it’s prepared to buy up to $8 billion worth.

Of all the defensive companies, major American ones are particularly appealing to investors in times of uncertainty. But be warned: so is the US dollar, and investors looking for safety pushed its value up last quarter 💸 That means any money a company earns abroad is worth less when it’s brought back Stateside – which is bad news for the likes of P&G, whose sales come all over the world. And it was that very phenomenon that knocked 2% off the company’s sales growth last quarter, much to some analysts’ disappointment.

Daily Brief Image


All the daily investing news and insights you need in one subscription.

Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG