Procter & Gamble Co. forecast higher profit and sales for the year on Thursday, encouraged by surging demand for its detergent and dish soap as consumers clean their homes more often amid the coronavirus pandemic.
Shares of the world’s biggest personal care goods company rose about 2 per cent to a record high of US$131.63 after it also beat estimates for fourth-quarter revenue and profit.
The company, which sells Bounty paper towels, Charmin toilet paper, Ariel detergent and Mr. Clean products, has seen an unprecedented demand for these products since the lockdowns started, often leading to shortages at some supermarkets.
“[P&G’s] products are more important than ever given the needs created by the current crisis. There’s an increased awareness of health and hygiene and additional time we’re all spending at home,” chief executive officer David Taylor said on a post-earnings call.
With lockdown restrictions easing in parts of the world, some companies, particularly packaged food makers like Nestle and Kellogg, have seen a drop in demand. But P&G’s numbers underscored sustained demand for its products.
“Pantry-loading benefits are likely to abate, though with underlying demand strong, our constructive view remains,” Jefferies analyst Kevin Grundy said. “P&G remains a stock to own through the recession.”
P&G forecast fiscal 2021 adjusted profit to rise between 3 per cent to 7 per cent, or US$5.27 per to US$5.48 per share, that were above expectations. It also expects sales to grow in the range of 1 per cent to 3 per cent.
In the quarter ended June 30, P&G’s organic sales, which strip out the impact of deals and currency fluctuations, were up 6 per cent, driven by strong growth in United States and Greater China.
Sales at P&G’s fabric and home care unit, home to Ariel and Dawn brands, increased 11 per cent. Sales at its baby, feminine and home care unit rose 3 per cent.
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