If the upcoming earnings season for consumer staples resembles a earnings day for Procter & Gamble (PG), then many stocks in the industry could go up a little further.
Shares of Tide laundry detergent and Gillette shaving product owner jumped nearly 2% on Wednesday, after another explosive quarter and optimistic outlook, both driven by changing consumer habits during the COVID-19 pandemic. The company saw organic sales growth in all business segments, with a 12% increase in the fabric treatment business, as families clean dishes and surfaces more, as they are at home 24 hours a day, 7 days a week.
“We are building on the basis of the strong momentum we have built in recent years. And that continues in the COVID environment, ”Jon Moeller, vice president and CFO of P&G, told Yahoo Finance.
See how P&G fared compared to Wall Street estimates for the second fiscal quarter.
-
Liquid sales: $ 19.7 billion against estimates of $ 19.23 billion
-
Diluted EPS core: $ 1.64 vs. estimates of $ 1.51 per share
-
Outlook FY21: Organic sales growth of + 5% to + 6% and main EPS growth of + 8% to + 10%
In addition, P&G has increased its sales for the fiscal year and profit outlook and said it will repurchase $ 10 billion in shares. The company previously planned to repurchase $ 7 billion to $ 9 billion in shares in its fiscal year, but Moeller says P&G has gained more confidence in the direction of business.
The main question that Wall Street now has about consumer basic products is how they will, as industry jargon says, “compile the comp” in the second half of 2021. In other words, consumer basic products may still show strong sales and profit gains compared to a year ago, at the height of the pandemic, when people around the world returned to some form of normalcy after inoculation. This return to normal may mean less purchases of a variety of consumer staples, from frozen foods to laundry detergents, and a slowdown in growth related to commodities.
Stock prices in the consumer commodity patch reflect the distress, as reported by Yahoo Finance.
P&G’s Moeller is well aware of concerns on the street, but remains confident that the business is in a new stable state.
“We are looking forward to meeting what we believe to be an ever-changing consumer need for products that help them with health, hygiene and a clean home. There are habits that are being formed during this unfortunately long period of COVID that we believe will continue to some degree after COVID, ”said Moeller.
P&G is the first in the market to open holes in the Wall Street thought bubble. Others may come soon.
Brian Sozzi is a general editor and anchor on Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi is on LinkedIn. Julia La Roche is a correspondent for Yahoo Finance. follow her Twitter.
What’s new with Yahoo Finance:
See Yahoo Finance’s live schedule at Verizon FIOS 604 Channel, Apple TV, Amazon Fire TV, Roku, Samsung TV, Pluto TV and Youtube. Online get Yahoo Finance at Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedInand reddit.