Updated July 30 at 4:25 p.m. ET
Procter & Gamble’s fourth-quarter earnings were a mixed bag.
The consumer goods giant reported fiscal year 2024 fourth-quarter net sales of $20.5 billion, unchanged versus the prior year, but lower than analysts’ forecast of $20.73 billion. Organic sales rose 2 percent. Diluted net earnings per share were $1.40, however, 3 cents above Wall Street estimates.
Beauty segment organic sales increased 3 percent versus a year ago. Skin and personal care organic sales were unchanged as growth from increased pricing was offset by lower sales of the SK-II brand and in Greater China.
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The brand, which saw sales drop 21 percent globally, has been hit by Chinese consumers’ ongoing boycott of Japanese beauty products. It started last summer when Japan began a controversial discharge of treated wastewater from the disabled Fukushima Daiichi Nuclear Power Station. Japan has maintained the treated water is safe, and the United Nation’s nuclear watchdog, the International Atomic Energy Agency, confirmed the plan.
Andre Schulten, P&G’s chief financial officer, said: “We expect general market trends and dynamics related to SK-II to improve over time, though it will likely be another quarter or two until we return to growth.”
Hair care organic sales increased high-single digits driven by higher pricing and favorable product mix due to growth of premium products.
Grooming segment organic sales, meanwhile, rose 7 percent, driven by increased pricing primarily in Latin America and volume growth from innovation.
On a geographical basis, while North America organic sales grew 5 percent and Europe 8 percent, Greater China organic sales were down 9 percent versus the prior-year driven by soft market conditions and brand-specific headwinds on SK-II. Enterprise markets were up 6 percent, led by Latin America.
“Fiscal year 2024 was another year of strong results for P&G,” said Jon Moeller, chairman of the board, president and chief executive officer. “As we look forward to fiscal 2025, we expect to deliver strong organic sales growth, EPS growth and free cash flow productivity — each in-line with our long-term growth algorithm.”
P&G expects fiscal year 2025 sales growth in the range of 2 to 4 percent versus the prior year. The company expects organic sales growth in the range of 3 to 5 percent.
Raymond James analyst Olivia Tong said: “This was a mixed print, and we expect the organic sales growth deceleration to 2 percent [year-over-year for the fourth quarter], the lowest since [fiscal year 2018], to overshadow a solid outlook for FY25.”
Its share price closed down 4.8 percent at $161.70.