Procter & Gamble lifted its annual sales forecast after price hikes helped fatten quarterly margins, the company said on Friday.
The personal care and hygiene company credited product mix for margin growth in an earnings call, saying "Consumers tend to trade up for higher unit sales items."
For the quarter, gross margin jumped 150 basis points from year ago, with a 470-basis point boost from increased pricing.
Tide, a laundry detergent owned by the Procter & Gamble company, is seen on a store shelf in Miami, Florida. ( Joe Raedle/Getty Images / Getty Images)
The Tide owner now expects an annual hit of about $3.5 billion related to higher commodity and freight costs, as well as negative foreign rates, compared with an earlier estimate of $3.7 billion.
The company said it also expects fiscal 2023 organic sales growth of about 6%, compared with its previous forecast for a 4% to 5% increase.
For the quarter, Proctor & Gamble reported net earnings of $1.37 a share for its third quarter to March 31, up 3% from the same period a year earlier. Analysts expected earnings of $1.35 a share on sales of $19.28 billion.
Meanwhile, net sales rose 4% to $20.1 billion.
Procter & Gamble also raised the upper end of its fiscal 2023 share buyback target to between $7.4 billion and $8 billion of common shares.