P&G raises full year sales and earnings outlook, ‘building on strong momentum’ amid COVID-19

If the approach of earnings season for consumer staples looks like a profit day for Procter & Gamble (PG), then many stocks in the sector could get one more leg.

The shares of laundry detergent Tide and owner of shaving products Gillette climbed nearly 2% on Wednesday after another explosive quarter and optimistic outlook, both fueled by shifting spending habits during the COVID-19 pandemic. The company experienced organic sales growth across all business segments, driven by a 12% gain in fabric care activities, with households doing more dish and surface cleaning as they are at home 24/7.

“We are building on the strong momentum we have built over the past few years. And it continues in the COVID environment, ”P&G vice president and chief financial officer Jon Moeller told Yahoo Finance.

Here’s how P&G performed against Wall Street estimates for its second fiscal quarter.

• Net sales: $ 19.7 billion vs. $ 19.23 billion estimate

• EPS diluted per core: $ 1.64 vs. $ 1.51 per share estimate

• Outlook FY21: Organic sales growth of + 5% to + 6% and basic EPS growth of + 8% to + 10%

In addition, P&G raised its full-year sales and earnings outlook, and announced it would buy back $ 10 billion in shares. Previously, the company planned to repurchase between $ 7 billion and $ 9 billion in shares during its fiscal year, but Moeller says P&G has gained confidence in the company’s leadership.

The main question Wall Street is asking about consumer staples right now is how they are, as the industry jargon puts it, “comp the comp” in the second half of 2021. In other words , can consumer staples still show strong sales and profits compared to a year ago, at the height of the pandemic, as populations around the world returned to some form of new normal after inoculation. This return to normal could mean fewer purchases of a line of consumer staples from frozen foods to laundry detergent and a related slower growth in consumer staples.

The story continues

Stock prices in the Consumer Staples patch reflect angst, as Yahoo Finance reported.

P&G’s Moeller is well aware of the concerns on the street, but remains confident that the company is in a new stable state.

“We are eager to respond to what we believe is a forever changed need for consumers for products that help them have healthy hygiene and a clean home. There are habits that form during this unfortunately long COVID period that we believe will continue to some extent after COVID, ”Moeller said.

P&G is the first in space to punch holes in the Wall Street thought bubble. Others may soon follow.

Brian Sozzi is an editor and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn. Julia La Roche is a correspondent for Yahoo Finance. Follow her on Twitter.

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