By Siddharth Cavale, Uday Sampath Kumar
(Reuters) – Procter & Gamble Co raised its annual sales and earnings forecasts on Tuesday, as households continued their coronavirus-driven cleaning sprees, pushing quarterly sales of the consumer goods giant’s home care products as much as 30% higher.
P&G’s shares, already up 14% this year, rose another 2% in early deals after the company released numbers that also showed strong gains in sales across most of its divisions.
Net sales of home care products including brands such as Mr Clean rose by double-digits percentage in every region, P&G said, as consumers stocked up on anything they could get their hands on to potentially slow the spread of the virus.
Grooming products also saw their first rise in sales growth since the start of the pandemic, as electronic stores in Europe placed more orders for trimmers and other styling products.
Sales of appliances, including Braun styling products, rose more than 30%, the company said. Personal cleansing products clocked double-digit rise in sales as well.
Lysol maker Reckitt Benckiser also lifted its full-year outlook on Tuesday, showing demand was still healthy in the industry despite tough economic conditions for many people.
“We have not seen downtrading to this point,” P&G’s finance chief, Jon Moeller, said on a media call. “There are large parts of consumer budgets still not being spent,” he said, pointing to household savings in the absence of travel and social gatherings.
Moeller said he expected heightened demand for branded products from companies like P&G to stay that way even after the pandemic ends.
“The result indicates continued share gains across most categories…(and) a modest benefit from inventory restocking in key markets,” Stifel analyst Mark Astrachan wrote in a note.
P&G said it now expects full-year sales to rise 3% to 4%, compared with a prior forecast of a 1% to 3% increase, the company said.
It also expects full-year core earnings per share to be up 5% to 8%, compared with 3% to 7% earlier, and said it would aim to buy back $7 billion to $9 billion in shares in fiscal 2021, up from its previous target.
Reporting by Uday Sampath and Siddharth Cavale in Bengaluru; Editing by Shounak Dasgupta, Patrick Graham and Saumyadeb Chakrabarty.