P&G Earnings Commentary for Q1 2024

Price Increases Drive 6% Net Sales Growth

Procter & Gamble reported Q1 2024 earnings on October 18, 2023.  P&G is a pillar of the Cincinnati economy, so we’ll take a look at their earnings in this note.

According to the company’s Q1 report, overall earnings were up: Net sales increased 6% versus last year, and diluted earnings increased 17% versus Q1 last year.

Despite higher net sales for the company, total unit sales (volume) declined by -1%. Looking closer, volume declined in every segment except Beauty, which posted no change. Consumers are spending more money on less product.

P&G Earnings:
Forex & Product Mix

The strong US dollar hurt earnings due to foreign exchange losses in all segments except Health Care, where exchange rates helped by 1%. Mix was a mixed bag with Beauty posting a -2% decline due to lower SK-II sales, and every other segment posting a positive 1% or 2%, putting the company-wide mix component up 1%.

P&G Earnings:
Higher Prices Drive Higher Sales

Price increases in every segment were the biggest driver of higher net sales for the quarter. Company-wide, prices rose 7%:

  • Health Care prices rose least, at 6%
  • Grooming prices rose the most, at 9%

P&G Earnings summary:
Gross Margins Higher

Pricing power, lower input costs, and higher productivity helped drive gross margins up 4.6%, even as SG&A costs increased by 2.6%, versus the year-ago quarter.Company Forecasts

Looking forward, P&G forecast their “all-in” sales growth between 2% to 4% for fiscal year 2024. The company adjusted its fiscal 2024 earnings per share between $6.25 to $6.43, versus fiscal 2023’s $5.90 per share. Procter and Gamble also expects as much as $800 million savings from lower commodity input costs, but they see savings fully offset by up to $1 billion in unfavorable currency exchange costs.

As part of our work managing investments for our clients, Schmitt Wealth Advisers reviews and analyzes financial news, company earnings, and economy related issues that matter to our clients. P&G and their continued growth as a company is important to our local economy. For more insights from Schmitt Wealth Advisers, visit Our Outlook blog. Want to start a conversation about your financial future? Contact us.


This material is provided by Schmitt Wealth Advisers, LLC 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.


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