In the face of rising energy and commodity costs, Procter & Gamble Co.’s fourth-quarter profits surged 33 percent.
This story first appeared in the August 6, 2008 issue of WWD. Subscribe Today.
Net earnings for the quarter ended June 30 were $3.02 billion, or 92 cents a diluted share, up from $2.27 billion, or 67 cents a share, in the year-ago period. Sales gained 10.3 percent to $21.27 billion from $19.27 billion, boosted somewhat by price increases intended to help offset rising costs.
For the year, net earnings gained 16.8 percent to $12.08 billion, or $3.64 a diluted share, from $10.34 billion, or $3.04 a share, on sales that grew 9.2 percent to $83.5 billion.
During the year, P&G completed the integration of Gillette and built its 24th billion-dollar brand, Fusion razors.
“We’ve more than doubled the size of our business over the last six years,” said chairman and chief executive officer A.G. Lafley during the company’s earnings call Tuesday, adding that P&G’s brands give the firm the number-one or number-two position in 18 product categories around the world.
In the quarter, net earnings for P&G’s beauty business were flat at $569 million, dragged down somewhat by rising commodity costs, on sales that rose 11 percent to $5.04 billion.
For the year, net earnings for beauty gained 5 percent to $2.73 billion, on sales that rose 9 percent to $19.52 billion.
By category, during the quarter volume was up in the high-single digits in cosmetics behind the continued success of Cover Girl Lash Blast mascara. Growth in developing regions drove skin care volume up by midsingle digits, and in hair care, softness in Professional Hair Care and in Pantene in North America slowed volume growth to the low-single digits. The company boosted its prestige hair care segment during the quarter with the acquisition of Frédéric Fekkai in May.
For fiscal 2009, P&G expects organic sales growth of 4 percent to 6 percent, in line with the firm’s long-term targets.