Procter & Gamble also warns of cost inflation

In the fourth quarter, Procter & Gamble‘s sales exceeded analyst expectations. However, the FMCG giant warns that rising raw material and freight costs will weigh on earnings for the current year.

Easing of restrictions

In the period from April to June, sales rose 7 per cent to 18.9 billion dollars (16 billion euros), while analysts had forecast sales of 18.4 billion dollars (15.5 billion euros), writes Fashion Network.

The phasing out of the Covid measures in the United States and parts of Europe helped the group increase revenues in its beauty segment by 11 per cent. Consumers again attended parties and other social events and consequently spent more on personal care products. Furthermore, the Health Care division, which includes oral care products, also performed above average.

Rising costs

The operating result in the reported quarter was 2 per cent higher than a year ago and landed at almost 3.5 billion dollars (3 billion euros). Nevertheless, the impact of rising raw material and transportation costs was already being felt: for the full financial year, operating profit increased by 15 per cent.

Procter & Gamble, therefore, fears that this cost inflation will weigh on the profit for the current financial year. The company estimates the total impact at about 1.9 billion dollars (1.6 billion euros). Sales should grow by 2-4 per cent in the next twelve months.