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- Shares of Procter & Gamble rose 3% in early trading on Tuesday after the consumer-goods company posted its strongest quarter of organic sales growth in more than a decade.
- Higher sales of beauty and health care products buffered the company’s struggling shaving business.
- Procter & Gamble posted revenue of $17.1 billion, beating Wall Street’s estimate of $16.9 billion.
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Shares of Procter & Gamble, the maker of Tide laundry detergent and Gillette shaving products, rose 3% on Tuesday after the company posted its best quarter of sales growth in more than a decade.
Organic sales growth hit 7% during its fiscal fourth quarter of 2019, outpacing last year’s lackluster 1% growth. The strong performance was a result of increased demand for health care, beauty, and home care products.
"We will continue to focus on superiority, productivity, constructive disruption and improving P&G’s organization and culture to deliver sustainable, balanced top-line and bottom-line growth along with strong cash generation in a challenging competitive and macroeconomic environment," Chief Executive Officer David Taylor said in a prepared statement.
Total sales grew to $17.1 billion, outperforming Wall Streets forecast of $16.9 billion. The company posted net a loss of $5.24 billion due to an $8 billion write-down of its Gillette Shave Care business to adjust the carrying value of its goodwill and intangible assets.
Procter & Gamble’s shaving business has also been hurt by new competitors like Harry’s, as well as changing consumer habits.
"The Shave Care business has also been negatively impacted by market contraction of blades and razors, primarily in developed markets, due to lower shaving frequency, and competitive activities," the company said in its earnings report.
The company expects 2020 revenue to grow between 3% and 4% from a year earlier, and estimates it will issue as much as $7.5 billion in dividends and buy back up to $8 billion in stock.
Procter & Gamble is up 30% year-to-date.
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Source: Business Insider – feedback@businessinsider.com (Daniel Strauss)