By Dhirendra Tripathi
Investing.com – Procter & Gamble stock (NYSE:PG) was up 2% in premarket trading Wednesday after price hikes and strong consumer demand for its healthcare and homecare products led its second quarter revenue past estimates.
Both total sales and organic sales were up 6% year-on-year as consumers looked for its detergents as well as other cleaning products. Net sales came in at $21 billion, riding a combination of a 3% increase in volumes and a similar rise in product prices.
While gross margins took a hit of 4 percentage points owing to higher commodity prices and expensive freight, consumers’ ability and willingness to absorb higher prices led the company to raise its annual outlook.
The maker of Ariel and Oral-B now expects its 2022 sales growth to be 3%-4%, a narrower forecast from the previous 2%-4%. The company also raised its guidance for organic sales growth to 4%-5% from 2%-4% earlier, a substantial increase for a company of its size at this stage of its financial year.
Volumes in the healthcare business were up 4% in the second quarter, which along with 1% increase in prices of such products, helped deliver an 8% jump in sales, the highest among P&G’s five key verticals. As the pandemic waned and gave way to seasonal flu, demand for P&G’s cough and cold treatments like Vicks rose. Demand for its toothpastes and whitening products was also strong.
Each region delivered double digit organic sales growth for the quarter in personal healthcare segment, P&G said.