Net Sales -1%; Organic Sales +5%;
Diluted EPS and Core EPS $1.59, each -4%
RAISES SALES GROWTH OUTLOOK
MAINTAINS FISCAL YEAR EPS GROWTH & CASH
GUIDANCE RANGES
The Procter & Gamble Company (NYSE:PG) reported second
quarter fiscal year 2023 net sales of $20.8 billion, a decrease of
one percent versus the prior year. Excluding the impacts of foreign
exchange and acquisitions and divestitures, organic sales increased
five percent. Diluted net earnings per share were $1.59, a decrease
of four percent versus prior year EPS.
Operating cash flow was $3.6 billion, and net earnings were $4.0
billion for the quarter. Adjusted free cash flow productivity was
72%, which is calculated as operating cash flow, less capital
spending, as a percentage of net earnings. The Company returned
$4.2 billion of cash to shareholders via approximately $2.2 billion
of dividend payments and $2 billion of common stock
repurchases.
$ billions, except EPS
Second Quarter
GAAP
2023
2022
% Change
Non-GAAP*
2023
2022
% Change
Net Sales
20.8
21.0
(1)%
Organic Sales
n/a
n/a
5%
Diluted EPS
1.59
1.66
(4)%
Core EPS
1.59
1.66
(4)%
*Please refer to Exhibit 1 - Non-GAAP
Measures for the definition and reconciliation of these measures to
the related GAAP measures.
“We delivered solid results in the second quarter of fiscal year
2023 in what continues to be a very difficult cost and operating
environment,” said Jon Moeller, Chairman of the Board, President
and Chief Executive Officer. “Progress against our plan fiscal year
to date enables us to raise our sales growth outlook for fiscal
2023 and maintain our guidance range for EPS growth despite
significant headwinds. We remain committed to our integrated
strategies of a focused product portfolio, superiority,
productivity, constructive disruption and an agile and accountable
organization structure. These strategies have enabled us to build
and sustain strong momentum. They remain the right strategies to
navigate through the near-term challenges we’re facing and continue
to deliver balanced growth and value creation.”
October - December Quarter Discussion
Net sales in the second quarter of fiscal year 2023 were $20.8
billion, a one percent decrease versus the prior year. Unfavorable
foreign exchange had a six percent impact on net sales. Organic
sales, which exclude the impacts of foreign exchange and
acquisitions and divestitures, increased five percent. The organic
sales increase was driven by a ten percent increase from higher
pricing and a one percent increase from positive product mix,
partially offset by a six percent decrease in shipment volumes.
October -
December 2022
Volume
Foreign
Exchange
Price
Mix
Other (2)
Net
Sales
Organic
Volume
Organic
Sales
Net Sales
Drivers (1)
Beauty
(4)%
(8)%
9%
(2)%
2%
(3)%
(4)%
3%
Grooming
(8)%
(9)%
11%
(3)%
—%
(9)%
(8)%
—%
Health Care
(1)%
(6)%
5%
4%
—%
2%
(1)%
8%
Fabric & Home Care
(7)%
(7)%
13%
2%
—%
1%
(7)%
8%
Baby, Feminine & Family Care
(6)%
(5)%
8%
2%
—%
(1)%
(6)%
4%
Total P&G
(6)%
(6)%
10%
1%
—%
(1)%
(6)%
5%
(1)
Net sales percentage changes are
approximations based on quantitative formulas that are consistently
applied.
(2)
Other includes the sales mix
impact from acquisitions and divestitures and rounding impacts
necessary to reconcile volume to net sales.
- Beauty segment organic sales increased three percent versus
year ago. Skin and Personal Care organic sales increased low single
digits due to innovation-driven volume growth and higher pricing,
partially offset by negative mix from COVID-related declines in
SK-II. Hair Care organic sales increased mid-single digits driven
by increased pricing, partially offset by volume declines due to
market contraction.
- Grooming segment organic sales were unchanged versus year ago
as higher pricing was fully offset by volume decline and negative
mix, due to market contraction and retailer inventory reductions of
appliances.
- Health Care segment organic sales increased eight percent
versus year ago. Oral Care organic sales increased low single
digits due to increased pricing and favorable geographic mix,
partially offset by volume declines due to portfolio reduction in
Russia and COVID-related disruptions in Greater China. Personal
Health Care organic sales increased high-teens due to increased
pricing, favorable mix and volume growth driven by a strong cough,
cold and flu season.
- Fabric and Home Care segment organic sales increased eight
percent versus year ago. Fabric Care organic sales increased high
single digits due to increased pricing, partially offset by volume
declines due to market contraction and increased pricing, primarily
in Europe. Home Care organic sales increased high single digits due
to increased pricing, partially offset by volume declines versus a
high base period of increased consumption of cleaning
products.
- Baby, Feminine and Family Care segment organic sales increased
four percent versus year ago. Baby Care organic sales increased low
single digits due to increased pricing, partially offset by volume
declines from market contraction. Feminine Care organic sales
increased high single digits driven by increased pricing and
positive geographic mix, partially offset by volume declines in
emerging markets. Family Care organic sales increased low single
digits due to increased pricing, partially offset by lower volumes
due to market contraction and market share softness.
Diluted net earnings per share decreased by four percent to
$1.59, driven by a decline in net sales and a decrease in operating
margin partially offset by a lower effective tax rate and a
reduction in shares outstanding. Currency-neutral EPS were up five
percent versus the prior year EPS.
Gross margin for the quarter decreased 160 basis points versus
year ago, 100 basis points on a currency-neutral basis. The decline
was driven by 380 basis points of increased commodity and input
material costs, 130 basis points of negative product mix and 140
basis points of capacity start-up costs and other impacts. These
were partially offset by benefits of 470 basis points from
increased pricing and 80 basis points from gross productivity
savings.
Selling, general and administrative expense (SG&A) as a
percentage of sales increased 10 basis points versus year ago and
decreased 30 basis points on a currency-neutral basis. The decrease
was driven by 130 basis points of leverage due to organic sales
growth and 30 basis points of productivity savings, partially
offset by 130 basis points of inflation, capability investments and
other impacts.
Operating margin for the quarter decreased 170 basis points
versus the prior year, 70 basis points on a currency-neutral basis.
Operating margin included gross productivity savings of 110 basis
points.
Fiscal Year 2023 Guidance
P&G raised its guidance for fiscal 2023 all-in sales to a
range of down one percent to in-line versus the prior fiscal year
from a prior range of down three percent to down one percent. The
Company also raised its outlook for organic sales growth to a range
of four to five percent versus the prior fiscal year from a prior
growth range of three to five percent. Foreign exchange is now
expected to be a five percentage point headwind to all-in sales
growth for the fiscal year.
P&G maintained its outlook for fiscal 2023 diluted net
earnings per share growth in the range of in-line to up four
percent versus fiscal 2022 EPS of $5.81. The Company added that
given continued significant cost headwinds from commodity and
materials costs and foreign exchange impacts, it continues to
expect EPS results to be towards the lower end of the fiscal year
guidance range.
P&G said its current fiscal 2023 outlook includes headwinds
of approximately $1.2 billion after-tax due to unfavorable foreign
exchange rates, $2.3 billion due to higher commodity and materials
costs, and $200 million from higher freight costs. Combined, these
items are a $3.7 billion after-tax headwind, or approximately $1.50
per share, to fiscal 2023 earnings versus fiscal 2022, or a
headwind of approximately 26 points to EPS growth. The $3.7 billion
headwind is a modest sequential improvement versus guidance
provided in October, due to both commodities and foreign
exchange.
The Company is unable to reconcile its forward-looking non-GAAP
cash flow measure and tax rate measures without unreasonable
efforts because the Company cannot predict the timing and amounts
of discrete cash items, such as acquisitions, divestitures, or
impairments, which could significantly impact GAAP results.
P&G now expects a core effective tax rate of approximately
20% in fiscal 2023.
Capital spending is estimated to be approximately 5% of fiscal
2023 net sales.
P&G continues to expect adjusted free cash flow productivity
of 90% and expects to pay around $9 billion in dividends and to
repurchase $6 billion to $8 billion of common shares in fiscal
2023.
Forward-Looking Statements
Certain statements in this release, other than purely historical
information, including estimates, projections, statements relating
to our business plans, objectives and expected operating results,
and the assumptions upon which those statements are based, are
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. These forward-looking statements generally are
identified by the words "believe," "project," "expect,"
"anticipate," "estimate," "intend," "strategy," "future,"
"opportunity," "plan," "may," "should," "will," "would," "will be,"
"will continue," "will likely result" and similar expressions.
Forward-looking statements are based on current expectations and
assumptions, which are subject to risks and uncertainties that may
cause results to differ materially from those expressed or implied
in the forward-looking statements. We undertake no obligation to
update or revise publicly any forward-looking statements, whether
because of new information, future events or otherwise, except to
the extent required by law.
Risks and uncertainties to which our forward-looking statements
are subject include, without limitation: (1) the ability to
successfully manage global financial risks, including foreign
currency fluctuations, currency exchange or pricing controls and
localized volatility; (2) the ability to successfully manage local,
regional or global economic volatility, including reduced market
growth rates, and to generate sufficient income and cash flow to
allow the Company to effect the expected share repurchases and
dividend payments; (3) the ability to manage disruptions in credit
markets or to our banking partners or changes to our credit rating;
(4) the ability to maintain key manufacturing and supply
arrangements (including execution of supply chain optimizations and
sole supplier and sole manufacturing plant arrangements) and to
manage disruption of business due to various factors, including
ones outside of our control, such as natural disasters, acts of war
(including the Russia-Ukraine War) or terrorism or disease
outbreaks; (5) the ability to successfully manage cost fluctuations
and pressures, including prices of commodities and raw materials
and costs of labor, transportation, energy, pension and healthcare;
(6) the ability to stay on the leading edge of innovation, obtain
necessary intellectual property protections and successfully
respond to changing consumer habits, evolving digital marketing and
selling platform requirements and technological advances attained
by, and patents granted to, competitors; (7) the ability to compete
with our local and global competitors in new and existing sales
channels, including by successfully responding to competitive
factors such as prices, promotional incentives and trade terms for
products; (8) the ability to manage and maintain key customer
relationships; (9) the ability to protect our reputation and brand
equity by successfully managing real or perceived issues, including
concerns about safety, quality, ingredients, efficacy, packaging
content, supply chain practices or similar matters that may arise;
(10) the ability to successfully manage the financial, legal,
reputational and operational risk associated with third-party
relationships, such as our suppliers, contract manufacturers,
distributors, contractors and external business partners; (11) the
ability to rely on and maintain key company and third-party
information and operational technology systems, networks and
services and maintain the security and functionality of such
systems, networks and services and the data contained therein; (12)
the ability to successfully manage uncertainties related to
changing political conditions and potential implications such as
exchange rate fluctuations and market contraction; (13) the ability
to successfully manage current and expanding regulatory and legal
requirements and matters (including, without limitation, those laws
and regulations involving product liability, product and packaging
composition, intellectual property, labor and employment,
antitrust, privacy and data protection, tax, the environment, due
diligence, risk oversight, accounting and financial reporting) and
to resolve new and pending matters within current estimates; (14)
the ability to manage changes in applicable tax laws and
regulations; (15) the ability to successfully manage our ongoing
acquisition, divestiture and joint venture activities, in each case
to achieve the Company's overall business strategy and financial
objectives, without impacting the delivery of base business
objectives; (16) the ability to successfully achieve productivity
improvements and cost savings and manage ongoing organizational
changes while successfully identifying, developing and retaining
key employees, including in key growth markets where the
availability of skilled or experienced employees may be limited;
(17) the ability to successfully manage the demand, supply and
operational challenges, as well as governmental responses or
mandates, associated with a disease outbreak, including epidemics,
pandemics or similar widespread public health concerns (including
COVID-19); (18) the ability to manage the uncertainties, sanctions
and economic effects from the war between Russia and Ukraine; and
(19) the ability to successfully achieve our ambition of reducing
our greenhouse gas emissions and delivering progress towards our
environmental sustainability priorities. For additional information
concerning factors that could cause actual results and events to
differ materially from those projected herein, please refer to our
most recent 10-K, 10-Q and 8-K reports.
About Procter & Gamble
P&G serves consumers around the world with one of the
strongest portfolios of trusted, quality, leadership brands,
including Always®, Ambi Pur®, Ariel®, Bounty®, Charmin®, Crest®,
Dawn®, Downy®, Fairy®, Febreze®, Gain®, Gillette®, Head &
Shoulders®, Lenor®, Olay®, Oral-B®, Pampers®, Pantene®, SK-II®,
Tide®, Vicks®, and Whisper®. The P&G community includes
operations in approximately 70 countries worldwide. Please visit
https://www.pg.com for the latest news and information about
P&G and its brands. For other P&G news, visit us at
https://www.pg.com/news.
THE PROCTER & GAMBLE
COMPANY AND SUBSIDIARIES
(Amounts in Millions Except
Per Share Amounts)
Consolidated Earnings
Information
Three Months Ended December
31
2022
2021
% Chg
NET SALES
$
20,773
$
20,953
(1)%
Cost of products sold
10,897
10,664
2%
GROSS PROFIT
9,876
10,289
(4)%
Selling, general and administrative
expense
5,091
5,121
(1)%
OPERATING INCOME
4,785
5,168
(7)%
Interest expense
(171
)
(106
)
61%
Interest income
66
10
560%
Other non-operating income, net
155
167
(7)%
EARNINGS BEFORE INCOME TAXES
4,835
5,239
(8)%
Income taxes
876
997
(12)%
NET EARNINGS
3,959
4,242
(7)%
Less: Net earnings attributable to
noncontrolling interests
26
19
37%
NET EARNINGS ATTRIBUTABLE TO PROCTER
& GAMBLE
$
3,933
$
4,223
(7)%
EFFECTIVE TAX RATE
18.1
%
19.0
%
NET EARNINGS PER SHARE (1)
Basic
$
1.63
$
1.72
(5)%
Diluted
$
1.59
$
1.66
(4)%
DIVIDENDS PER COMMON SHARE
$
0.9133
$
0.8698
DILUTED WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING
2,481.2
2,544.2
COMPARISONS AS A % OF NET SALES
Basis Pt Chg
Gross profit
47.5
%
49.1
%
(160)
Selling, general and administrative
expense
24.5
%
24.4
%
10
Operating income
23.0
%
24.7
%
(170)
Earnings before income taxes
23.3
%
25.0
%
(170)
Net earnings
19.1
%
20.2
%
(110)
Net earnings attributable to Procter &
Gamble
18.9
%
20.2
%
(130)
(1)
Basic net earnings per share and
Diluted net earnings per share are calculated on Net earnings
attributable to Procter & Gamble.
THE PROCTER & GAMBLE
COMPANY AND SUBSIDIARIES
(Amounts in Millions)
Consolidated Earnings
Information
Three Months Ended December
31, 2022
Net Sales
% Change
Versus Year
Ago
Earnings/(Loss) Before
Income Taxes
% Change
Versus Year
Ago
Net Earnings/(Loss)
% Change
Versus Year
Ago
Beauty
$3,807
(3)%
$1,145
(3)%
$911
(4)%
Grooming
1,643
(9)%
496
(14)%
404
(15)%
Health Care
3,051
2%
887
(2)%
686
(2)%
Fabric & Home Care
7,032
1%
1,538
5%
1,171
3%
Baby, Feminine & Family Care
5,065
(1)%
1,112
(6)%
848
(7)%
Corporate
175
N/A
(343)
N/A
(61)
N/A
Total Company
$20,773
(1)%
$4,835
(8)%
$3,959
(7)%
Three Months Ended December
31, 2022
Net Sales
Drivers (1)
Volume
Organic
Volume
Foreign
Exchange
Price
Mix
Other (2)
Net Sales
Beauty
(4)%
(4)%
(8)%
9%
(2)%
2%
(3)%
Grooming
(8)%
(8)%
(9)%
11%
(3)%
—%
(9)%
Health Care
(1)%
(1)%
(6)%
5%
4%
—%
2%
Fabric & Home Care
(7)%
(7)%
(7)%
13%
2%
—%
1%
Baby, Feminine & Family Care
(6)%
(6)%
(5)%
8%
2%
—%
(1)%
Total Company
(6)%
(6)%
(6)%
10%
1%
—%
(1)%
(1)
Net sales percentage changes are
approximations based on quantitative formulas that are consistently
applied.
(2)
Other includes the sales mix
impact from acquisitions and divestitures and rounding impacts
necessary to reconcile volume to net sales.
THE PROCTER & GAMBLE
COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per
Share Amounts)
Consolidated Statements of
Cash Flows
Six Months Ended December
31
Amounts in
millions
2022
2021
CASH, CASH EQUIVALENTS AND RESTRICTED
CASH, BEGINNING OF PERIOD
$
7,214
$
10,288
OPERATING ACTIVITIES
Net earnings
7,922
8,368
Depreciation and amortization
1,316
1,395
Share-based compensation expense
250
268
Deferred income taxes
(398
)
(101
)
Gain on sale of assets
(3
)
(82
)
Changes in:
Accounts receivable
(654
)
(644
)
Inventories
(655
)
(840
)
Accounts payable, accrued and other
liabilities
177
1,431
Other operating assets and liabilities
(535
)
(84
)
Other
224
53
TOTAL OPERATING ACTIVITIES
7,644
9,764
INVESTING ACTIVITIES
Capital expenditures
(1,598
)
(1,717
)
Proceeds from asset sales
8
97
Acquisitions, net of cash acquired
(76
)
(349
)
Other investing activity
344
3
TOTAL INVESTING ACTIVITIES
(1,322
)
(1,966
)
FINANCING ACTIVITIES
Dividends to shareholders
(4,486
)
(4,353
)
Additions to short-term debt with original
maturities of more than three months
10,447
6,747
Reductions in short-term debt with
original maturities of more than three months
(3,260
)
(1,730
)
Net reductions to other short-term
debt
(1,759
)
(1,124
)
Additions to long-term debt
—
2,136
Reductions in long-term debt
(1,877
)
(1,673
)
Treasury stock purchases
(6,002
)
(7,504
)
Impact of stock options and other
437
1,215
TOTAL FINANCING ACTIVITIES
(6,500
)
(6,286
)
EFFECT OF EXCHANGE RATE CHANGES ON
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
(182
)
(256
)
CHANGE IN CASH, CASH EQUIVALENTS AND
RESTRICTED CASH
(360
)
1,256
CASH, CASH EQUIVALENTS AND RESTRICTED
CASH, END OF PERIOD
$
6,854
$
11,544
THE PROCTER & GAMBLE
COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per
Share Amounts)
Condensed Consolidated Balance
Sheets
December 31, 2022
June 30, 2022
Cash and cash equivalents
$
6,854
$
7,214
Accounts receivable
5,767
5,143
Inventories
7,541
6,924
Prepaid expenses and other current
assets
1,704
2,372
TOTAL CURRENT ASSETS
21,866
21,653
Property, plant and equipment, net
21,167
21,195
Goodwill
39,951
39,700
Trademarks and other intangible assets,
net
23,594
23,679
Other noncurrent assets
11,137
10,981
TOTAL ASSETS
$
117,715
$
117,208
Accounts payable
$
14,153
$
14,882
Accrued and other liabilities
10,293
9,554
Debt due within one year
14,300
8,645
TOTAL CURRENT LIABILITIES
38,746
33,081
Long-term debt
20,582
22,848
Deferred income taxes
6,462
6,809
Other noncurrent liabilities
7,200
7,616
TOTAL LIABILITIES
72,990
70,354
TOTAL SHAREHOLDERS' EQUITY
44,725
46,854
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY
$
117,715
$
117,208
The Procter & Gamble Company
Exhibit 1: Non-GAAP Measures
The following provides definitions of the non-GAAP measures used
in Procter & Gamble's January 19, 2023 earnings release and the
reconciliation to the most closely related GAAP measures.
Management believes that these non-GAAP measures provide useful
perspective on underlying business trends and provide a
supplemental measure of period-to-period financial results.
Disclosing these non-GAAP financial measures allows investors and
management to view our operating results excluding the impact of
items that are not reflective of the underlying operating
performance. Management uses these non-GAAP measures in making
operating decisions, allocating financial resources and for
business strategy purposes. Certain of these measures are also used
to evaluate senior management and are a factor in determining their
at-risk compensation. Non-GAAP financial measures should be viewed
in addition to, and not as an alternative for, the Company’s
reported results prepared in accordance with GAAP. Our non-GAAP
financial measures do not represent a comprehensive basis of
accounting. Therefore, our non-GAAP financial measures may not be
comparable to similarly titled measures reported by other
companies. The Company is not able to reconcile its forward-looking
non-GAAP cash flow and tax rate measures because the Company cannot
predict the timing and amounts of discrete items such as
acquisition and divestitures, which could significantly impact GAAP
results.
Organic sales growth: Organic sales
growth is a non-GAAP measure of sales growth excluding the impacts
of acquisitions and divestitures and foreign exchange from
year-over-year comparisons. We believe this measure provides
investors with a supplemental understanding of underlying sales
trends by providing sales growth on a consistent basis. This
measure is used in assessing achievement of management goals for
at-risk compensation.
Currency-neutral operating margin:
Currency-neutral operating margin is a measure of the Company's
operating margin excluding the incremental current year impact of
foreign exchange. Management believes this non-GAAP measure
provides a supplemental perspective to the Company’s operating
efficiency over time.
Currency-neutral gross margin:
Currency-neutral gross margin is a measure of the Company's gross
margin excluding the incremental current year impact of foreign
exchange. Management believes this non-GAAP measure provides a
supplemental perspective to the Company’s operating efficiency over
time.
Currency-neutral selling, general and
administrative (SG&A) expense as a percentage of net
sales: Currency-neutral SG&A expense as a percentage of
net sales is a measure of the Company's selling, general and
administrative expenses excluding the incremental current year
impact of foreign exchange. Management believes this non-GAAP
measure provides a supplemental perspective to the Company's
operating efficiency over time.
Core EPS: Core earnings per share,
or Core EPS, is a measure of the Company's diluted net earnings per
share adjusted as indicated. Management views this non-GAAP measure
as a useful supplemental measure of Company performance over time.
This measure is also used when evaluating senior management in
determining their at-risk compensation. For the period covered by
this release, there are no reconciling items for Core EPS.
Currency-neutral EPS:
Currency-neutral EPS is a measure of the Company's EPS excluding
the incremental current year impact of foreign exchange. Management
views this non-GAAP measure as a useful supplemental measure of
Company performance over time.
Adjusted free cash flow: Adjusted
free cash flow is defined as operating cash flow less capital
spending. Adjusted free cash flow represents the cash that the
Company is able to generate after taking into account planned
maintenance and asset expansion. Management views adjusted free
cash flow as an important measure because it is one factor used in
determining the amount of cash available for dividends, share
repurchases, acquisitions and other discretionary investments.
Adjusted free cash flow
productivity: Adjusted free cash flow productivity is
defined as the ratio of adjusted free cash flow to net earnings.
Management views adjusted free cash flow productivity as a useful
measure to help investors understand P&G’s ability to generate
cash. Adjusted free cash flow productivity is used by management in
making operating decisions, allocating financial resources and for
budget planning purposes. This measure is also used in assessing
the achievement of management goals for at-risk compensation.
THE PROCTER & GAMBLE COMPANY
AND SUBSIDIARIES
(Amounts in Millions Except Per
Share Amounts)
Reconciliation of Non-GAAP
Measures
Three Months Ended
December 31, 2022
Three Months Ended
December 31, 2021
AS REPORTED (GAAP)
AS REPORTED (GAAP)
COST OF PRODUCTS SOLD
$
10,897
$
10,664
GROSS PROFIT
9,876
10,289
GROSS MARGIN
47.5
%
49.1
%
CURRENCY IMPACT TO GROSS MARGIN
0.6
%
CURRENCY-NEUTRAL GROSS MARGIN
48.1
%
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSE
5,091
5,121
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSE AS A % OF NET SALES
24.5
%
24.4
%
CURRENCY IMPACT TO SELLING, GENERAL AND
ADMINISTRATIVE EXPENSE AS A % OF NET SALES
(0.4
)%
CURRENCY-NEUTRAL SELLING, GENERAL AND
ADMINISTRATIVE EXPENSE AS A % OF NET SALES
24.1
%
OPERATING INCOME
4,785
5,168
OPERATING MARGIN
23.0
%
24.7
%
CURRENCY IMPACT TO OPERATING
MARGIN
1.0
%
CURRENCY-NEUTRAL OPERATING
MARGIN
24.0
%
NET EARNINGS ATTRIBUTABLE TO
P&G
3,933
4,223
DILUTED NET EARNINGS PER COMMON SHARE
(1)
$
1.59
$
1.66
CURRENCY IMPACT TO EARNINGS
$
0.16
CURRENCY-NEUTRAL CORE EPS
$
1.75
DILUTED WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING
2,481.2
2,544.2
COMMON SHARES OUTSTANDING - December
31, 2022
2,359.1
(1) Diluted net earnings
per share are calculated on Net earnings attributable to Procter
& Gamble.
CHANGE IN CURRENT YEAR REPORTED (GAAP)
AND NON-GAAP MEASURES VERSUS PRIOR YEAR REPORTED (GAAP)
MEASURES
GROSS MARGIN
(160
)
BPS
CURRENCY-NEUTRAL GROSS MARGIN
(100
)
BPS
SELLING GENERAL & ADMINISTRATIVE
EXPENSE AS A % OF NET SALES
10
BPS
CURRENCY-NEUTRAL SELLING GENERAL &
ADMINISTRATIVE EXPENSE AS A % OF NET SALES
(30
)
BPS
OPERATING MARGIN
(170
)
BPS
CURRENCY-NEUTRAL OPERATING MARGIN
(70
)
BPS
EPS
(4
)%
CURRENCY-NEUTRAL EPS
5
%
Organic sales growth:
October -
December 2022
Net
Sales Growth
Foreign
Exchange
Impact
Acquisition &
Divestiture
Impact/Other (1)
Organic
Sales
Growth
Beauty
(3)%
8%
(2)%
3%
Grooming
(9)%
9%
—%
—%
Health Care
2%
6%
—%
8%
Fabric & Home Care
1%
7%
—%
8%
Baby, Feminine & Family Care
(1)%
5%
—%
4%
Total P&G
(1)%
6%
—%
5%
(1)
Acquisitions/Divestiture
Impact/Other includes the volume and mix impact of acquisitions and
divestitures and rounding impacts necessary to reconcile net sales
to organic sales.
Total
P&G
Net
Sales Growth
Combined
Foreign Exchange &
Acquisition/Divestiture Impact/Other (1)
Organic
Sales
Growth
FY 2023 (Estimate)
(1)% to 0%
+5%
+4% to +5%
(1)
Acquisitions/Divestiture
Impact/Other includes the volume and mix impact of acquisitions and
divestitures and rounding impacts necessary to reconcile net sales
to organic sales.
Adjusted free cash flow (dollar amounts in
millions):
Three Months Ended December
31, 2022
Operating Cash Flow
Capital
Spending
Adjusted
Free Cash Flow
$3,574
$(708)
$2,866
Adjusted free cash flow productivity
(dollar amounts in millions):
Three Months Ended December
31, 2022
Adjusted
Free Cash Flow
Net
Earnings
Adjusted
Free Cash Flow Productivity
$2,866
$3,959
72%
Category: PG-IR
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230118005970/en/
P&G Media Contacts:
Erica Noble, 513.271.1793 Jennifer Corso, 513.983.2570
P&G Investor Relations
Contact: John Chevalier, 513.983.9974
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