1min read The Procter & Gamble Company (NYSE:PG) reported its first quarter fiscal year 2024 results this week, showcasing a strong performance with net sales of $21.9 billion, an increase of six percent versus the prior year. Organic sales, which excludes the impacts of foreign exchange and acquisitions and divestitures, increased by seven percent. This growth was driven by higher prices, which boosted the top line by seven percent, while sales volume declined by one percent.
Diluted earnings per share (EPS) and Core EPS both rose by 17% to $1.83. The company's operating cash flow stood at $4.9 billion, and net earnings were $4.6 billion. Adjusted free cash flow productivity was 97%, calculated as operating cash flow as a percentage of net earnings.
Procter & Gamble returned $3.8 billion to shareholders through $2.3 billion in dividends and $1.5 billion in stock repurchases. The various business segments, such as Beauty, Grooming, and Health Care, showed organic sales growth between five percent to ten percent. Gross margin increased by 460 basis points, driven mainly by increased pricing and favorable commodity costs.
However, the company's selling, general, and administrative (SG&A) expenses increased as a percentage of sales by 220 basis points, mainly due to marketing investments and wage inflation. Despite foreign exchange headwinds expected to impact sales by 1-2 percentage points, the company maintains its organic sales growth outlook at 4-5%.
The maker of Gillette razors and Tide Pods is on track to deliver full-year organic sales and earnings per share growth towards the higher end of its fiscal-year guidance ranges. Procter & Gamble plans to pay more than $9 billion in dividends and repurchase $5 to $6 billion of common shares in fiscal 2024.
The stock rallied as much as 3.75% on the release, and the company's shares rose more than 2% in afternoon trading. Through Tuesday, the stock was down 3.5% this year.
In conclusion, Procter & Gamble's Q1 fiscal year 2024 results demonstrate a strong performance, driven by higher prices and increased gross margins. The company's commitment to returning value to shareholders and its optimistic outlook for the rest of the fiscal year are positive indicators for investors.
