A leading industry analyst has said that consumer goods giant Procter & Gamble is "clearly firing on all cylinders", after the firm posted a net sales gain of 7% in the first quarter of the year.
Bonne Herzog of Wells Fargo was commenting in response to a quarter that saw "strong top-line growth, profit margin expansion and cash productivity" for Procter & Gamble, according to its chief executive David Taylor.
'Well Ahead Of Consensus'
Commenting on the group's performance, Herzog said that P&G's first quarter "surpassed even the most optimistic expectations (including ours)", noting that organic sales growth of 7% for the period "should again be the best in large-cap staples and well ahead of consensus".
P&G raised its full-year 2020 guidance across the board, with Herzog noting that such a move is "NOT typical so early in the fiscal year, and evidence management has conviction that momentum will continue".
In addition, both gross and EBIT margin were "well ahead of consensus, with above-the-line items driving a significant EPS beat ($0.13 above consensus)", she added.
Sales Performance
Procter & Gamble posted sales of $17.8 billion for the period, with organic sales rising 7% despite the net impacts of foreign exchange, acquisitions and divestitures.
Its Beauty division saw net sales up 8%, while Health Care was up 20%, Fabric & Home Care was up 6% and Baby, Feminine & Family Care was up 4%.
The only segment to see a decline was Grooming, which saw a 2% drop in net sales.
“We will continue executing our strategies of superiority, productivity, constructive disruption and improving P&G’s organisation and culture to deliver balanced top-line and bottom-line growth along with strong cash generation in a challenging competitive and macroeconomic environment," David Taylor said of the group's results.
Commenting on the likely impact of the results on P&G's share performance, Herzog added, "Overall, we can't emphasise enough how strong these results were this quarter and with shares weak into the print (down -5% vs. S&P +1% since 9/30), we expect PG to trade up sharply today."
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
