Procter & Gamble Records 4% Organic Sales Growth
Procter & Gamble announced a 4% organic sales growth for fiscal year 2024, continuing a streak of six consecutive years with at least a 4% rise. Net sales rose 2%, to $84 billion, while fourth-quarter sales, shipment volumes and product mix were flat year over year.
The Cincinnati-based consumer packaged goods (CPG) company reported net income of $3.14 billion for the fiscal fourth quarter. P&G CEO Jon Moeller highlighted the company’s ability to meet or exceed its growth targets despite a challenging economic and geopolitical landscape.
“Fiscal year 2024 was another year of strong results for P&G,” Moeller said during the Q4 and full-year earnings call on Tuesday (July 30). “The team met or exceeded our going-in plans for organic sales growth, core EPS growth, cash generation and cash returned to shareowners in a challenging economic and geopolitical environment.”
Moeller said P&G remains committed to its integrated strategy of “a focused product portfolio of daily use categories where performance drives brand choice, superiority (of product performance, packaging, brand communication, retail execution and consumer and customer value), productivity, constructive disruption and an agile and accountable organization — all aimed at delivering sustainable, balanced growth and value creation.”
For the April-June quarter, net sales were flat at $20.5 billion, with a 1% rise in volume and pricing offset by foreign exchange headwinds. The company is restructuring operations in select markets like Nigeria and Argentina, incurring significant restructuring costs. It recorded a $216 million charge for currency losses related to these markets and anticipates additional charges as it exits Argentina.
P&G’s Beauty segment saw a 3% increase in organic sales year-over-year. Skin and Personal Care sales remained flat, as higher prices offset declines in premium SK-II brand sales and challenges in China. Hair Care, however, experienced high single-digit growth, driven by elevated pricing and a shift toward premium products.
The Grooming segment delivered 7% organic sales growth, primarily due to higher prices in Latin America and successful new product innovations.
In Health Care, organic sales grew 4%. Oral Care posted high single-digit growth, fueled by a premium product mix and strong performance in North America and Europe. Conversely, Personal Health Care sales were flat, as pricing and volume gains were balanced by decreased cough and cold occurrences.
The Fabric and Home Care segment saw a 2% increase in organic sales. Fabric Care sales were stable, with North American and European volume growth offset by lower pricing due to increased promotions. Meanwhile, Home Care recorded high single-digit growth, attributed to innovation and product mix.
The Baby, Feminine and Family Care segment faced a 1% decline in organic sales. Baby Care sales fell by mid-single digits due to volume losses. Feminine Care grew modestly through higher pricing, while Family Care sales were flat.
Moeller noted the 4% organic sales growth was achieved amid a “very volatile environment,” and said, “To be very clear, there’s more work to do to continue driving areas in our control. Our strategy is dynamic and sustainable. It adapts to the changing needs of consumers, customers, and societies.”
He also cited the company’s digital acumen, improving its ad copy and media buying through the development of proprietary digital tools to digitize more of the company’s back-office work processes.
Chief Financial Officer Andre Schulten said 85% of the company’s business is performing in line with expectations, particularly in North American and Europe, and “our growth margin is at record levels.” But he noted those “headwinds from December will still be with us in Q1 2025,” largely dependent on the pace of economic recovery in China.
Moeller remains confident of P&G’s future, saying it “holds great promise. We have an opportunity to grow markets and our business and we’ll double down on our strategy. The fundamentals of our business are in very strong shape.”
Looking ahead to fiscal 2025, Moeller expects the company to “deliver strong organic sales growth, EPS growth and free cash flow productivity — each in-line with our long-term growth algorithm.”
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