P&G Shares Jump as Turnaround Takes Hold in ‘Challenging’ Market
(Bloomberg) -- Procter & Gamble Co. reported higher-than-expected growth in the latest quarter and boosted the upper end of its sales forecast, even as its grooming segment lost ground in the quarter before its controversial Gillette ad was released. Shares soared as much as 6.6 percent as of 9:35 a.m. in New York.
- Organic sales, which exclude items like acquisitions and currency effects, rose 4 percent in the October to December quarter. That’s more than the 2.7 percent analysts expected.
- The results show that the company’s turnaround plan, which was criticized by billionaire investor Nelson Peltz before he joined the board, is indeed paying off. The company is “delivering improved results despite a challenging competitive and macroeconomic environment,” Chief Executive Officer David Taylor said in a statement.
- Analysts had worried higher pricing would scare away customers, but that doesn’t seem to be the case for beauty, health care or home care. Pricing contributed 1 percent to organic sales as overall shipping volumes rose 2 percent. But not all segments swallowed the price increases the same: Baby care organic sales saw some volume reductions due to increased prices, it said.
- The Cincinnati-based company’s results were broadly better than analysts’ expectations. It increased the high end of guidance for organic sales, now estimated in a range of two to four percent for fiscal 2019. The sales growth will be a relief to investors after several warnings from other big consumer-facing companies in recent weeks sounded the alarm about a worsening global economic outlook.
- P&G shares rose the most intraday since October.
- For more on the results, click here.
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