Procter & Gamble earnings beat estimates, but quarterly sales disappoint as China demand slides

Procter & Gamble on Tuesday reported weaker-than-expected quarterly revenue as disappointing demand in China weighed on the company’s results.

Shares of the company fell 5% in morning trading.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

• Earnings per share: $1.40 adjusted vs. $1.37 expected
• Revenue: $20.53 billion vs. $20.74 billion expected

P&G reported fiscal fourth-quarter net income attributable to the company of $3.14 billion, or $1.27 per share, down from $3.38 billion, or $1.37 per share, a year earlier.

Excluding items, the company earned $1.40 per share.

Net sales of $20.53 billion were essentially flat compared with the year-ago period. P&G’s organic revenue, which excludes foreign currency, acquisitions and divestitures, increased 2% in the quarter.

Despite disappointing sales, the company’s volume increased for the first time in more than two years.

Volume excludes pricing, making the metric a more accurate reflection of demand than sales. Over the last several years, P&G’s price hikes across its portfolio, from diapers to detergent, fueled its sales growth, but volume flattened or even declined as consumers bought fewer of its products.

P&G’s volume rose 1%, thanks to stronger demand for its grooming, health care, and fabric and home-care products. All three of those segments reported 2% volume growth for the quarter.

But the company’s beauty and baby, feminine and family care divisions continued to struggle. Both units saw volume fall 1%, hurt by lower demand for its pricey SK-II skin-care brand and diapers, respectively.

In North America, the company is growing market share. This quarter, volume in its home market rose 4%, executives said on the company’s earnings call. Consumers aren’t trading down, based on private label goods’ relatively flat market share. And P&G’s promotions are still down about 15% compared with pre-pandemic levels.

But China, P&G’s second-largest market, continues to struggle. The company didn’t disclose the region’s quarterly volume, but organic sales in Greater China slid 9%. Executives said underlying market conditions have stayed weak. Sluggish demand in China contributed to volume declines for P&G’s beauty business.

For fiscal 2025, P&G anticipates core net earnings per share in a range of $6.91 to $7.05. The company reiterated its revenue outlook of 2% to 4% growth.