Strong Q4 Results
Shares in Procter and Gamble are continuing to decline this week. The company has now seen its stock price falling 11% from the highs posted in Q3 last year. Shares have come under fresh pressure over recent days despite better than expected Q4 results.
Procter and Gamble reported fourth-quarter earnings per share of $1.64, beating Wall Street estimates for a $1.51 EPS. Revenues were also higher than expected at $19.75 billion, again, beating estimates for a $19.27 billion result. With this latest rise, revenues were seen 8% higher on the same quarter a year prior.
Increased Demand For Cleaning Products
The company attributes the boost in revenues to the uptick in demand for its cleaning and grooming products, fuelled by online sales over the course of the pandemic. Notably, the company’s organic sales, which discounts acquisitions, divestitures, and foreign currency, also climbed 8% year on year.
Big Growth in Sales
Commenting on the results, Procter and Gamble FO and COO Jon Moeller said:
“It’s a combination of products that were planned and a quick response to real, emerging needs.”
One example of this is P&Gs Microban 24 hour disinfectant spray which launched in February just ahead of the lockdowns in the US which sparked a huge rise in demand for cleaning products.
Furthermore, P&G noted that its fabric and home care segment also saw 12% growth in organic sales, the largest increase in any of the company’s individual businesses.
Home Care, which also includes Comet cleaning products, saw 30% growth as a result of significantly higher demand for household cleaning items.
Similarly, the company’s health care business, which includes brands such as Vicks and Oral B, also saw a big rise in demand though, interestingly, the company saw a drop in sales of respiratory products due to fewer people contracting colds or flu this year.
Looking ahead, the big question for P&G is whether it can sustain this recent bout of growth and strong sales as vaccine programs gather momentum and economies start to move back to normal over 2021.
P&G Bear Channel Continues
P&G shares continue to trade lower within the bearish channel which has framed the sell-off from 2020 highs. Price has broken below the 139.57 level and is now testing the bottom of the bear channel, just ahead of 127.85 support. If price breaks below here, the next support to watch will be the 121.77 level.
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