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Procter & Gamble Posted Strong Sales in Q3

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Strong organic sales 

Procter & Gamble (PG) posted better-than-expected third-quarter sales. Procter & Gamble’s net sales of $16.5 billion beat analysts’ estimate of $16.4 billion and increased ~1% on a YoY (year-over-year) basis.

The company’s top-line beat was aided by its stellar organic sales, which increased 5% in the third quarter. Higher pricing (+2%), increased volumes (+2%), and a favorable product mix (+1%) drove the company’s organic sales.

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Two of the company’s largest markets, including the US and China, recorded organic sales growth of 4% and 11%, respectively. Management stated that organic growth was broad-based.

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Kimberly-Clark (KMB) posted healthy organic sales growth during the last reported quarter. Kimberly-Clark’s organic sales rose 3% due to higher pricing and a positive mix. Higher pricing and innovation are expected to drive the organic sales of other consumer packaged goods companies including Colgate-Palmolive (CL), Church & Dwight (CHD), and Clorox (CLX).

Organic sales by segments

The beauty segment’s organic sales rose 9% due to higher volumes and pricing and a favorable mix. In the beauty segment, skin and personal care organic sales increased by the mid-teens, which reflects premium innovation and a favorable product mix. Organic sales in the hair care category marked mid-single-digit growth due to strong growth in developed and developing regions. Higher pricing supported organic sales.

The grooming segment’s organic sales continued to decline and fell 1% in the third quarter. The volumes were impacted by higher pricing amid heightened competitive activity.

The health care segment’s organic sales rose 5%, which reflected strong volumes growth and a favorable sales mix in developed markets. The fabric and home care segment’s organic sales rose 7%, which reflected innovation-driven volumes growth.

Organic sales in the baby, feminine, and family care segment increased 2% due to the higher pricing and mix. However, the baby care organic sales fell by the low-single digits, which reflected the heightened competitive activity.

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