Procter & Gamble Co on Tuesday raised its full-year sales and profit forecasts after a better-than-expected first quarter, as it sold more toothpaste and expensive face cream.
Shares of the world’s biggest personal care goods company rose 4.1 per cent in premarket trading.
P&G, which makes Tide detergent, Pampers diapers and Pantene shampoo, has been raising prices and investing in new products across most of its business, hoping to claw back market share from upstart brands that have cropped up in recent years.
“P&G is clearly firing on all cylinders,” Wells Fargo analyst Bonnie Herzog said. “P&G raised its full-year guidance across the board, which is not typical so early in the fiscal year, and evidence management has conviction that momentum will continue.”
P&G forecast full-year core earnings growth in the range of 5 per cent to 10 per cent, compared with its prior estimate of 4 per cent to 9 per cent growth. The company expects full-year sales to grow as much as 5 per cent, compared with earlier expectation of 4 per cent. P&G retained its lower-end sales growth forecast of 3 per cent.
The company also received a 0.4 percentage point sales boost from Japan, where retailers and shoppers hoarded beauty, household, baby and fabric care products and Baby businesses ahead of a planned VAT increase in October.
Organic sales, which exclude acquisitions, divestitures and currency effects, rose 7 per cent in the company’s fiscal first quarter, ended Sept. 30. P&G said organic sales rose 10 per cent in its beauty business, which makes SK-II and Olay products. The company, which launched its Oral-B Genius X electric toothbrush and Crest toothpaste aimed at people with sensitive teeth and gums, said organic sales rose 9 per cent at its healthcare business.
Organic sales in the grooming unit, a sore point for the company after it took a $8 billion writedown for its Gillette shaving business in the fourth quarter, reported 1 per cent growth.
Chief Financial Officer Jon Moeller said in a post-earnings media call that P&G was trying to raise awareness about new Gillette products. Rivals like Unilever’s Dollar Shave Club and Edgewell Personal Care’s Harry’s have proven to be stiff competition in the shaving category.
Overall, net sales climbed 6.6 per cent to $17.80 billion, beating analysts’ average estimate of $17.42 billion, according to IBES data from Refinitiv. Net income attributable to the company rose to $1.36 per share from $1.22 per share a year earlier. Excluding items, P&G earned $1.37 per share, beating estimates of $1.24.