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Proctor and Gamble’s (NYSE: PG) annual revenue for the third quarter of fiscal 2022, beat analysts' estimates. The company's revenue rose 7% to $19.38 billion compared to the expected figure of $18.73 billion.
P&G announced its results on Wednesday morning as the economy continues to be riddled with elevated commodity and freight costs.
The company reported a net income of $3.36 billion, or $1.33 per share, up from $3.27 billion, or $1.26 per share, a year earlier.
Input costs cut margins
Despite the stellar performance, P&G’s gross margin fell 4 percentage points compared with the year-ago period. Its operating margin dropped just 0.1 percentage point in the quarter.
In an earnings call, CFO Andre Schulten told reporters that the Russia Ukraine war would add to the pressures on input costs, and hence the price hikes would offset higher input costs.
“If we look at the current situation in the markets — the imbalance between supply and demand, geopolitical disruption, the need to disrupt supply chains, higher energy costs due to the war between Ukraine and Russia — all of those will continue to put pressure on the cost side,” he said.
The company raised its full-year inflation forecast for the third consecutive quarter. It predicted a $2.5 billion hit from higher commodity costs, $400 million from increased freight costs, and $300 million from foreign currency headwinds.
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With inputs from P&G