P&G(PG) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Organic sales grew 2% compared to a strong base period of 7% growth, with volume contributing 1 point and pricing adding another 1 point [4][10] - Core earnings per share (EPS) were $1.93, up 5% year-over-year, with a currency-neutral increase of 4% [7][10] - Core operating margin increased by 30 basis points, with productivity improvements contributing 230 basis points [7][10] Business Line Data and Key Metrics Changes - Eight of ten product categories grew or held organic sales, with family care, home care, and personal healthcare each growing mid-single digits [4][5] - Hair care, oral care, feminine care, fabric care, and grooming grew low singles, while baby care and skin and personal care declined mid-singles [4][5] Market Data and Key Metrics Changes - Organic sales in North America grew 4%, driven by 4 points of volume growth, maintaining a consistent growth trend over the last five quarters [5][6] - Europe focus markets saw organic sales up 3%, despite a 15% growth in the base period, with volume up 4 points [5][6] - Greater China organic sales declined 15%, with underlying market conditions weakening further [6][10] Company Strategy and Development Direction - The company remains committed to an integrated strategy that has delivered strong results over the past six years, focusing on balanced growth and value creation [9][10] - The strategy includes driving superiority across all five vectors, improving productivity, and fostering innovation to adapt to market changes [9][10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing challenges in the operating environment, including input costs, currency fluctuations, and geopolitical dynamics [10][12] - The guidance for fiscal year 2025 remains unchanged, with expectations for organic sales growth in the range of 3% to 5% [10][12] Other Important Information - The company returned nearly$ 4.4 billion to shareholders this quarter, including over $2.4 billion in dividends and over$ 1.9 billion in share repurchases [7][12] - The company plans to pay around $10 billion in dividends and repurchase$ 6 billion to $7 billion in common stock for the fiscal year [12] Q&A Session Summary Question: Concerns about growth trajectory and market deceleration - Management acknowledged the challenges in markets like China and the Middle-East but emphasized strong performance in North America and Europe, which constitute 85% of sales [15][16] Question: Risks around market share and consumer behavior - Management highlighted that consumers continue to trade up within their product categories, maintaining share growth in the US and Europe despite external pressures [19][20] Question: Gross margins and cost of goods sold inflation - Management indicated that productivity improvements are the main driver of gross margin progress, with expectations for continued contributions from cost savings initiatives [25][26] Question: Performance of specific business segments - Management noted that the family care business remains stable and sustainable, while the baby care segment faces challenges due to declining birth rates [29][30] Question: Market share performance and future opportunities - Management expressed confidence in market share growth, particularly in the US and Europe, and emphasized the importance of increasing household penetration in their categories [39][40]