- Procter & Gamble (NYSE:PG) reports organic sales rose 9% in FQ1 to more than double the consensus mark of +4.1%. Organic shipment volume was up 7% during the quarter, and higher pricing and mix both added a point of growth. Positive mix was driven by the disproportionate growth of premium home, health and hygiene products and the North American business, driven in part by pandemic-related consumption and inventory increases.
- Segment standouts were Health Care (+12%) and Fabric/Home Care (+14%), while Baby, Feminine and Family Care (+4%) lagged.
- On a currency-neutral basis, reported gross margin increased 170 bps Y/Y, driven by 120 basis points of productivity savings, 70 basis points help from lower commodity cost, 40 basis points of pricing benefit and 20 basis points of fixed-cost leverage, partially offset by 80 basis points of unfavorable product mix and other costs. Adjusted operating margin was 27.0% vs. 24.6% expected.
- CEO update: "Our near-term priorities continue to be employee health and safety, maximizing availability of P&G products for consumers around the world, and helping society meet the challenges of the COVID crisis. We remain firmly focused on executing our strategies of superiority, productivity, constructive disruption and improving P&G’s organization and culture to deliver balanced top-line and bottom-line growth along with strong cash generation."
- On the capital allocation front, P&G expects to pay approximately $8B in dividends in FY21. The company increased its outlook for buybacks to a range of $7B-9B in FY21.
- Shares of Procter & Gamble are up 1.83% premarket to $144.50.
- Earlier: Procter & Gamble EPS beats by $0.20, beats on revenue