Procter & Gamble beat second-quarter results estimates, driven by growing demand for its household items such as Pantene shampoos and Tide detergents as product innovations across price tiers helped lure more US customers.
Shares of the company, considered a bellwether for the consumer goods sector, rose nearly 3% in premarket trading.
P&G has doubled down investments on innovation, and launched affordable products such Olay Melts and Tide Evo to draw in lower-income shoppers, following a drop in customer demand due to repeated price hikes.
The company has also tried to revamp its marketing and line-up of influencers on fast-growing Chinese shopping app Douyin in recent months, which helped its Pantene shampoo lead growth in hair care on the platform, executives said in November.
P&G reported a 2% rise in overall organic volumes in the second quarter, while the average prices across its product categories remained flat.
Market Share Gain
The company has been able to gain market share in the US, which accounts for nearly half of P&G's total sales, according to analysts, mainly benefiting from new launches such as Luvs Platinum Protection.
P&G has been selling its products across price points ranging from $5 to $60 in some categories.
The company has also started to see some concerns related to demand for beauty brand SK-II in China ease, following several quarters of sales declines due to rising anti-Japanese sentiment.
However, P&G maintained its annual forecasts as growth in China continues to lag previous records due to weak consumption trends.
The company's second-quarter net sales rose to $21.88 billion (€21 billion) from $21.44 billion (€20.6 billion) a year earlier. Analysts had expected $21.54 billion (€20.7 billion), according to LSEG data.
It earned a profit of $1.88 per share, beating estimates of $1.86.
Jon Moeller, chairman of the board, president and chief executive officer, stated, “Our first-half results keep us on track to deliver within our guidance ranges on all key financial metrics for the fiscal year.
“We remain committed to our integrated growth strategy of a focused product portfolio of daily use categories where performance drives brand choice, superiority — across product performance, packaging, brand communication, retail execution and consumer and customer value — productivity, constructive disruption and an agile and accountable organisation. This strategy has enabled our solid results and is a foundation for balanced growth and value creation.”
News by Reuters, additional reporting by ESM.
