On October 20th, 2020 Procter & Gamble reported 1st quarter 2021 earnings results (see P&G’s press release here).
For the quarter, the company reported top line revenues of $19.3 Billion, beating the $18.3 Billion consensus estimate and diluted earnings per share were $1.63 vs. the $1.43 consensus estimate.
First quarter 2021 net sales growth was up 9% vs. Q1 2020, driven by gains in all five P&G business segments.
Segment Results
The Fabric & Home Care (F&HC) segment continued to lead with net revenue up 14%. F&HC saw notable gains of 30%+ in Home Care driven by continued pandemic related demand for cleaning products.
PG’s Healthcare segment netted 12% revenue growth. This was followed by Beauty up 7%, driven by a 30% bump in global personal cleansing products and notable gains by their high-end SKII line. Grooming climbed a healthy 6% and Baby Feminine & Family Care grew 4%.
Forward Guidance
The company revised its fiscal 2021 ‘all-in’ sales growth forecast from 1% – 3% to 3% – 4% and its ‘core’ earnings per share to a range of $5.38 – $5.53.
Valuation
Applying 2021 forward guidance to PG’s October 19th, 2020 closing price ($141.91) at the high end of their guidance range gives PG a 25.7x price/earnings valuation and 26.4x at the low end.
First quarter 2021 earnings did come in higher than expected, however, expectations remain high as PG’s current valuation continues to trade near the high-end of the range over the past decade (14.6x in 2011 and 25.7x in 2019).
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