Procter & Gamble (NYSE:PG) on Wednesday reported quarterly earnings and revenue that topped Wall Street’s expectations as price hikes helped to offset widespread inflation and a margins crunch.
The consumer goods giant reported a quarter riddled with economic challenges. Elevated commodity and freight costs dented the company’s margins, but higher prices and productivity savings helped counteract some of the drag on profits.
The company’s gross margin fell four percentage points compared with the year-ago period, although its operating margin dropped just 0.1 percentage point in the quarter.
P&G reported fiscal third-quarter net income of $3.36 billion, or $1.33 per share, up from $3.27 billion, or $1.26 per share, a year earlier.
Excluding items, the company earned $1.33 per share, topping the $1.29 per share expected by analysts surveyed by Refinitiv.
Net sales rose 7% to $19.38 billion, beating expectations of $18.73 billion. The company’s organic revenue climbed 10% in the quarter, although volume, which strips out the impact of currency and price changes, was up just 3%.
Health care was the top-performing division for the company this quarter, with 16% organic sales growth, helped by a stronger cold and flu season and new sleep and digestive products. The segment includes Vicks and ZzzQuil cold medicine, Oral-B toothbrushes and Crest toothpaste.
P&G’s fabric and home care and its baby, feminine and family care divisions both reported organic sales growth of 10%. The baby and feminine care segments got a boost from higher prices as well, in addition to market growth.
P&G shares marched ahead $4.31, or 2.7%, to $163.72.