Procter & Gamble Stock Gains as Q2 Earnings & Sales Beat Estimates

Financial Performance - Core earnings per share (EPS) of $1.88 increased 2% year over year, beating the Zacks Consensus Estimate of $1.86 [2] - Currency-neutral core EPS rose 3% year over year [2] - Net sales of $21.9 billion increased 2% year over year, surpassing the Zacks Consensus Estimate of $21.6 billion [3] - Organic sales grew 3% year over year, driven by a 2% increase in organic volume [4] - All business segments reported growth in organic sales, with the Baby, Feminine & Family Care segment leading at 4% [6] Segment Performance - Baby, Feminine & Family Care segment net sales grew 3% year over year [5] - Health Care and Fabric & Home Care segments each saw 2% net sales growth [5] - Grooming segment net sales improved 1%, while Beauty segment net sales were flat [5] - Organic sales growth was 4% for Baby, Feminine & Family Care, 3% for Health Care and Fabric & Home Care, and 2% for Grooming and Beauty segments [6] Margins and Expenses - Core and reported gross margin declined 30 basis points (bps) year over year to 52.4% [7] - Currency-neutral gross margin contracted 20 bps to 52.5% [7] - Core SG&A expenses as a percentage of sales increased 50 bps to 26.2% [8] - Core operating margin contracted 80 bps year over year to 26.2% [9] Cash Flow and Shareholder Returns - Operating cash flow was $4.8 billion, with adjusted free cash flow of $3.9 billion [11] - Adjusted free cash flow productivity was 84% [11] - Returned $4.9 billion to shareholders, including $2.4 billion in dividends and $2.5 billion in share buybacks [13] Fiscal 2025 Guidance - Anticipates year-over-year all-in sales growth of 2-4% and organic sales growth of 3-5% [14] - GAAP EPS expected to increase 10-12% from fiscal 2024, with core EPS rising 5-7% [15] - Core EPS guidance range is $6.91-$7.05, with a mid-point of $6.98 [15] - Adjusted free cash flow productivity estimated at 90% [18] - Plans to pay $10 billion in dividends and repurchase $6-$7 billion in shares [18] Industry Comparison - Clorox (CLX) has a Zacks Rank 2 with a trailing four-quarter earnings surprise of 45.9% [19][20] - Energizer (ENR) has a Zacks Rank 2 with a trailing four-quarter earnings surprise of 8.3% [20][21] - Ollie's Bargain Outlet (OLLI) has a Zacks Rank 2 with a trailing four-quarter earnings surprise of 5% [21][22]