Procter & Gamble's earnings beat estimates, but weak demand in China hurt sales

Procter & Gamble It reported weaker-than-expected earnings on Friday as weak demand in China again weighed on its sales.

Shares of the company fell 1% in premarket trading.

Here's what the company reported compared to what Wall Street expected, based on a survey of LSEG analysts:

• Earnings per share: $1.93 adjusted vs. $1.90 expected
• Revenue: $21.74 billion vs. $21.91 billion expected

P&G reported fiscal first-quarter net income of $3.96 billion, or $1.61 per share, down from $4.52 billion, or $1.83 per share, a year earlier.

Excluding restructuring charges and other items, the company earned $1.93 per share.

Net sales Down 1% to $21.71 billion. Organic revenue, which excludes foreign exchange, acquisitions and disposals, rose 2%, helped by higher prices.

The company reported flat volumes for the quarter. The metric excludes price, which makes it a more accurate reflection of demand than sales. Like many consumer companies, P&G saw demand for its products decline after years of price increases. Last quarter saw its volume rise for the first time in more than two years.

Weak demand in Greater China, the company's second-largest market, weighed on P&G's sales again this quarter. The company reported volume declines in both hair care and oral care in China.

P&G's beauty business, which includes brands such as Pantene and Olay, saw volume decline 2% in the quarter. In particular, its skincare segment struggled, with organic sales down more than 20%. P&G attributed the sharp decline to lower volumes and declining sales of its premium SK-II brand, which has struggled since the pandemic lockdown.

P&G's healthcare and baby, feminine and family care divisions both reported volume declines of 1% for the quarter. But its baby care segment, which includes Pampers diapers, had a worse quarter with its organic sales falling by the mid-single digits.

P&G's grooming division, which includes Gillette and Venus, reported 4% volume growth. The company credits innovation for its strong performance.

The company's fabric and home care businesses grew 1% in volume during the quarter. The category includes Swiffer, Febreze and Tide products.

P&G reiterated its fiscal 2025 forecast. It expects core net income per share in the range of $6.91 to $7.05 and revenue growth of 2% to 4%.