(Reuters) -Procter & Gamble raised its annual core profit forecast on Friday, as it benefits from easing commodity costs and higher product prices of its cleaning and household items.
As raw material prices come down from the peaks seen during the pandemic, major consumer goods companies are seeing a relief from higher production costs.
P&G said it now expects a benefit of about $900 million after-tax from favorable commodity costs for fiscal year 2024, compared with its earlier forecast of an $800 million benefit.
The consumer goods giant now expects core earnings per share to rise between 10% and 11% in fiscal 2024, above its prior forecast of 8% to 9% growth.
Third-quarter net sales rose to $20.20 billion from $20.07 billion a year earlier, but fell short of analysts’ average expectation of $20.41 billion, according to LSEG data.
Shares of the company were marginally down in premarket trading.
P&G has seen a hit to sales from weak consumer spending in its second-largest market China, which is reeling under high youth unemployment, a sluggish property market and deflationary pressures.
This has also led to lower sales for P&G’s beauty brand, SK-II, which has overshadowed gains from steady sales of daily-use products in the United States and Europe.
P&G reported overall flat volumes in the third quarter, while the average prices across its product categories rose 3%.
Net income attributable to Procter & Gamble rose $3.75 billion, or $1.52 per share, in the quarter ended March 31, from $3.40 billion, or $1.37 per share, a year earlier.
(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Shinjini Ganguli)
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