Procter & Gamble Co raised its annual sales forecast on Wednesday, as the consumer goods giant benefits from higher prices and resurgent demand for cleaning products due to a spike in COVID-19 infections.
The company’s blue-chip stock rose nearly 1 percent in premarket trading as a better-than-expected 6 percent jump in quarterly sales helped cushion the blow from a bigger-than-previously forecast increase in annual freight and commodity costs.
P&G said sales in its fabric & home care unit, the company’s biggest segment and home to brands such as Tide and Mr. Clean, rose 7 percent in its second quarter, as the rapid spread of the Omicron coronavirus variant since late last year led to consumers stocking up again on detergents and surface cleaning products.
Organic sales in the company’s personal health care business increased about 20 percent as a more intense flu season led to a rise in demand for respiratory products, P&G said.
Overall net sales rose to $20.95 billion, also helped by price increases the company implemented last year to cope with higher commodity and freight costs. Analysts on average had expected sales of $20.34 billion, according to IBES data from Refinitiv.
The Gillette razor maker said it expects fiscal 2022 organic sales to rise 4 percent to 5 percent, compared with its prior forecast of a 2 percent to 4 percent increase.
P&G said it now expects a hit of about $2.8 billion related to commodity, freight and foreign exchange headwinds this fiscal year, compared with a prior forecast of about $2.3 billion.
By Uday Sampath and Siddharth Cavale