PG Procter and Gamble Co

By Aisha Al-Muslim 

Procter & Gamble Co. reported strong quarterly sales growth, continuing a streak of robust gains that prompted the consumer-products giant to raise its outlook for the year.

The maker of Tide detergent and Gillette razors said organic sales -- a closely watched metric that strips out currency moves, acquisitions and divestitures -- rose 4% in the fiscal second quarter. Organic sales were boosted by 1% due to higher pricing.

Beauty products fueled the gains, with organic sales rising 8%, but the company reported growth across a number of categories including health care, and fabric and home care. The growth came from higher consumption and pricing.

The Cincinnati-based company has struggled to boost sales in an industry facing more competition, a consumer shift toward smaller brands, changing tastes and higher costs of raw materials and transportation.

After trying to combat weak demand by lowering prices, P&G changed course late last year, saying it would increase prices for products including its Pampers, Bounty, Charmin and Puffs brands. Other consumer-goods makers have followed P&G's lead on raising prices amid commodity-price increases, foreign-currency fluctuations and a stronger U.S. dollar.

P&G said prices were 1% higher during the quarter. Overall, the price increases appeared to not have had a negative impact on consumption. Shipment volumes rose 2% from a year ago.

P&G said profit rose 28% to $3.19 billion, or $1.22 cents a share, in the second quarter, which ended Dec. 31, 2018. Core earnings were $1.25 a share, beating the $1.21 a share analysts polled by Refinitiv were looking for. Core earnings strip out currency moves, acquisitions and divestitures.

Net sales were $17.44 billion, unchanged from the previous year, but unfavorable foreign-exchange fluctuations hurt sales by 4%. Analysts were expecting net sales to fall slightly to $17.15 billion.

Investors cheered the results in premarket trading on Wednesday, sending P&G shares up 3.1%. Shares are up 1.6% in the past 12 months.

P&G increased the high end of its full-year forecast for organic sales to rise 2% to 4%, compared with its prior estimates of 2% to 3%.

The company now estimates overall sales to be down 1% to up 1% for the full year, including foreign-exchange headwinds, compared with the previous outlook of down 2%.

The company maintained its expectation for core earnings-per-share growth of 3% to 8% for fiscal 2019. The outlook includes an estimated $1.4 billion headwind from foreign exchange and higher commodity costs as well as higher transportation costs.

Write to Aisha Al-Muslim at aisha.al-muslim@wsj.com

(END) Dow Jones Newswires

January 23, 2019 07:57 ET (12:57 GMT)

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