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Waves of the pandemic, clogged shipping ports and the
Russia-Ukraine war have snarled global supply chains and led to
a jump in prices of commodities including pulp, resin and
polypropylene, pinching profits of consumer goods makers.
Companies' price hikes to offset those cost increases are also
now being met with some resistance from major retailers, which
are worried about waning consumer demand due to red hot
inflation.
"As we look forward to fiscal 2023, we expect another year of
significant headwinds," P&G Chief Executive Officer Jon Moeller
said in a statement.
The maker of Tide detergent forecast average fiscal 2023
earnings per share of $5.93, below analysts' view of $6.02, with
the company estimating an about $3.3 billion hit from a stronger
dollar and higher commodity and freight costs.
A stronger greenback typically eats into profits of companies
such as P&G that have sprawling global operations and convert
foreign currencies into dollars.
On an adjusted basis, the company earned $1.21 per share in the
fourth quarter ended June 30, missing analysts' estimates of
$1.22 per share, according to IBES data from Refinitiv
The company said net sales rose 3% to $19.52 billion, beating
analysts' estimates of $19.41 billion, as it benefited from
higher prices of its detergents and homecare products.
Prices across P&G's brands, from Gillete to Old Spice, rose on
average about 8% in the fourth quarter, while sales volumes fell
about 1%.
The company forecast fiscal 2023 organic sales growth of 3% to
5%, compared to over 7% in 2022, signaling a slowdown in
consumer demand.
(Reporting by Uday Sampath in Bengaluru; Editing by Maju Samuel)
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