P&G 2021 Q4 & Year End Earnings

On July 30^th, 2021 Procter & Gamble reported 4th quarter & fiscal year-end 2021 earnings results (see press release here).

For the quarter, the company reported 7% top line revenue growth to $18.9 Billion versus last year. Diluted earnings per share (EPS) in Q4 was $1.13 vs. a $1.08 consensus estimate.

Overall ‘organic’ revenue increased 4% versus the same quarter last year.  The company saw positive organic revenue gains in all but one segment.

P&G’s Health Care segment led with organic revenues up 14%, driven primarily by 13% volume growth in the quarter. Baby, Feminine & Family Care, posted a -1% organic sales decline mostly due to moderating volumes vs. heavy pandemic spending in the base quarter.

Net pricing increased 1% in Q4. According to a CNBC report, P&G plans to raise prices more this September (here).  The company is looking for ways to offset an expected $1.9 billion ($0.70 per share) after-tax headwind next year from to higher commodity, transportation, and exchange costs.

In the 2021 fiscal year, P&G grew revenues to $76.1 billion, up 7% from the year prior. Diluted ‘core’ EPS was up 11% from 2020 to $5.50 per share. The company paid $8.3 billion in dividends and made $11.0 billion worth of share repurchases.

P&G set its fiscal 2022 “all-in” sales growth forecast to a range of 2% to 4% versus fiscal 2021. The company expects 2022 bottom line ‘core’ EPS to grow between 3%-6% vs. 2021’s $5.50 per share.

These estimates would put P&G’s full year ‘core’ earnings per share in a range of $5.67 to $5.83 for fiscal 2022.  Applying 2022 guidance to P&G’s July 30^th, 2021, closing price ($142.23) places their forward price/earnings valuations between 24.4 and 25.1 times earnings.

In all, both Q4 and FY 2021 earnings beat consensus forecasts, forward guidance remains strong, and expectations remain high.  P&G’s price-earnings valuation continues to trend near the high-end of its range over the past decade (14.6x in 2011 and 25.7x in 2019).

This material is provided by Schmitt Wealth Advisers for informational purposes only.  It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy, or investment product.  Opinions expressed by Schmitt Wealth Advisers are based on economic or market conditions at the time this material was written.  Economies and markets fluctuate.  Actual economic or market events may turn out differently than anticipated.  Facts presented have been obtained from sources believed to be reliable.  Schmitt Wealth Advisers, however, cannot guarantee the accuracy or completeness of such information.  Past performance may not be indicative of future results.