On July 30, 2024, Procter & Gamble Co (PG, Financial) released its 8-K filing for the fourth quarter and fiscal year 2024. The company, one of the world's largest consumer product manufacturers, reported revenues and earnings per share (EPS) that missed analyst estimates.
Company Overview
Since its founding in 1837, Procter & Gamble has become one of the world's largest consumer product manufacturers, generating more than $80 billion in annual sales. It operates with a lineup of leading brands, including more than 20 that generate north of $1 billion each in annual global sales, such as Tide laundry detergent, Charmin toilet paper, Pantene shampoo, and Pampers diapers. P&G sold its last remaining food brand, Pringles, to Kellogg in calendar 2012. Sales outside its home turf represent around 53% of the firm's consolidated total.
Fiscal Year 2024 Performance
For the fiscal year 2024, Procter & Gamble Co (PG, Financial) reported net sales of $84.0 billion, a 2% increase compared to the previous year. Organic sales, which exclude the impacts of foreign exchange and acquisitions and divestitures, rose by 4%. Higher pricing contributed significantly to this growth, while shipment volumes and mix remained unchanged.
Net earnings per share (EPS) for the fiscal year were $6.02, a 2% increase from the prior year. Core EPS, which excludes certain non-recurring items, increased by 12% to $6.59. The company generated an operating cash flow of $19.8 billion and returned over $14 billion to shareholders through dividends and share repurchases.
Fourth Quarter 2024 Results
In the fourth quarter, Procter & Gamble Co (PG, Financial) reported net sales of $20.5 billion, unchanged from the same period last year. Organic sales increased by 2%, driven by a 1% increase in all-in volume and higher pricing, which were offset by unfavorable foreign exchange impacts.
Diluted EPS for the quarter was $1.27, a 7% decrease from the previous year, primarily due to higher restructuring charges. Core EPS, however, increased by 2% to $1.40. The company generated an operating cash flow of $5.8 billion and net earnings of $3.1 billion for the quarter.
Segment Performance
| Segment | Net Sales | % Change | Organic Sales | % Change |
|---|---|---|---|---|
| Beauty | $3,724 million | -1% | +3% | |
| Grooming | $1,657 million | 0% | +7% | |
| Health Care | $2,674 million | +3% | +4% | |
| Fabric & Home Care | $7,265 million | 0% | +2% | |
| Baby, Feminine & Family Care | $5,009 million | -3% | -1% |
Financial Metrics and Analysis
Procter & Gamble Co (PG, Financial) reported a gross profit of $10.2 billion for the fourth quarter, a 2% increase from the previous year. The gross margin improved by 120 basis points to 49.6%, driven by productivity savings and lower commodity costs. However, selling, general, and administrative expenses increased by 9% to $6.3 billion, impacting the operating margin, which decreased by 140 basis points to 18.9%.
The company's effective tax rate for the quarter was 18.8%, down from 19.9% in the previous year. Net earnings attributable to Procter & Gamble were $3.1 billion, a 7% decrease from the prior year.
Commentary and Outlook
“Fiscal year 2024 was another year of strong results for P&G,” said Jon Moeller, Chairman of the Board, President and Chief Executive Officer. “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.”
Looking ahead to fiscal year 2025, Procter & Gamble Co (PG, Financial) expects all-in sales growth in the range of 2% to 4% and organic sales growth between 3% and 5%. The company also anticipates diluted net earnings per share growth of 10% to 12% and core EPS growth of 5% to 7%.
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Procter & Gamble Co for further details.
