Shares of Procter & Gamble (PG) surged in pre-market trading after the company reported robust Fiscal Q2 results. The consumer goods company’s adjusted earnings increased by 2% year-over-year to $1.88 per share, above consensus estimates of $1.86 per share.
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PG’s Revenue Growth Driven by Fabric Business
Furthermore, the company’s revenues increased by 2% year-over-year to $21.9 billion in the Fiscal second quarter. This surpassed Street estimates of $21.6 billion. Interestingly, the company reported a 1% increase in volume during the quarter, a key metric that excludes pricing to better reflect demand. This modest growth comes as consumer demand has softened following years of price hikes across the industry.
The company’s Fabric and Home Care business continued to lead its sales with a 2% growth year-over-year. This business comprised more than 30% of PG’s total revenues in the Fiscal second quarter and clocked sales of $7.8 billion.
PG’s Family Care Business Drives Volume Growth
The company’s baby, feminine, and family care division led its volume growth, with a 4% rise driven by strong performance from Charmin, Puffs, and Tampax. However, baby care sales declined slightly as fewer parents purchased Pampers diapers.
In contrast, P&G’s beauty division saw a 1% decline in volume. This drop was attributed to weaker hair care sales in Greater China and a global decrease in Olay skin care product volumes.
PG Reiterates FY25 Guidance
Looking ahead, the company expects adjusted earnings to grow in the range of 5% to 7% year-over-year to between $6.91 and $7.05 per share. Furthermore, PG has projected its revenues to increase between 2% and 4% year-over-year. For reference, analysts were expecting the company to report earnings of $6.91 per share.
Is PG a Good Stock to Buy Now?
Analysts remain cautiously optimistic about PG stock, with a Moderate Buy consensus rating based on 12 Buys and six Holds. Over the past year, PG has increased by more than 10%, and the average PG price target of $180.50 implies an upside potential of 11.6% from current levels. These analyst ratings are likely to change following PG’s results today.
