P&G Reports Accelerated Sales and Unit Volume Growth
Snacks and Pet Care net sales increased six percent to $835 million for the quarter on a one percent increase in unit volume. Organic sales increased three percent.
29 Jan 2010 --- Procter & Gamble Company delivered net sales growth of six percent for the October - December quarter to $21.0 billion. Organic sales grew five percent which was at the top of the Company's guidance range. Diluted net earnings per share were $1.49 and diluted net earnings per share from continuing operations were $1.01. Core EPS increased 22 percent to $1.10 for the quarter, above the Company's guidance range, on better than expected sales growth and margin expansion. The Company raised its expectations of fiscal 2010 organic sales growth and Core EPS.
"We are pleased with the top- and bottom-line underlying results for the quarter," said Chairman of the Board, President and Chief Executive Officer Bob McDonald. "Our investments in innovation, portfolio expansion, marketing support and consumer value are working. We continue to drive simplification and leverage our scale to create cost advantages and accelerate growth. While economic uncertainty remains, we're confident these strategies will enable P&G to serve more consumers in more parts of the world, more completely and deliver profitable market share growth."
Diluted net earnings per share were $1.49. Core EPS grew 22 percent to $1.10. Core EPS is earnings per share from continuing operations excluding a legal reserve established in the current period and incremental Folgers-related restructuring charges in the base period.
Net sales increased six percent for the quarter to $21.0 billion on higher unit volume and favorable foreign exchange. Organic sales growth, which excludes the impacts of acquisitions, divestitures and foreign exchange, was five percent.
Operating margin expanded 160 basis points for the quarter behind a 330 basis point improvement in gross margin, partially offset by a 170 basis point increase in selling, general and administrative (SG&A) expenses.
Operating cash flow was $3.3 billion for the quarter, an increase of 50 percent. Adjusted free cash flow, which is operating cash flow less capital spending and the impacts of the global pharmaceuticals divestitures, was $3.1 billion and over 96 percent of net earnings excluding the impacts of the global pharmaceuticals divestitures.
Snacks and Pet Care net sales increased six percent to $835 million for the quarter on a one percent increase in unit volume. Organic sales increased three percent. The carryover impact of pricing to recover higher commodity costs added five percent to net sales. This was partially offset by negative mix impacts of two percent driven by the discontinuation of premium snack products which had higher than segment average selling prices. Favorable foreign exchange contributed two percent to net sales growth. Volume in Snacks declined low single digits driven by lower merchandising activity in North America and the discontinuation of some premium snack products. Volume in Pet Care increased mid-single digits behind continued success of product initiatives and increased promotional activity. Net earnings increased 56 percent versus the prior year period to $98 million behind higher gross margin resulting from price increases, lower commodity costs and manufacturing cost savings. SG&A as a percentage of net sales increased primarily due to higher marketing spending.
