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Procter & Gamble (PG) Q4 earnings preview: Navigating stabilizing trends and North American momentum

AInvestMonday, Jul 29, 2024 6:05 pm ET
1min read

In the wake of a tepid Q3 performance, Procter & Gamble (PG) is set to present its Q4 earnings, with anticipation for flat earnings per share at $1.37. Investors will be keen on the company's ability to demonstrate consumption trend stabilization, which could pave the way for a solid fiscal year 2025 outlook.

Despite a challenging environment marred by price hikes, the North American market's sustained growth has been a bright spot, with volume expansion of 3% in Q3.

The uneven global performance highlights the importance of regional dynamics. While focus markets in Europe and Latin America have shown resilience, more developed regions like Europe, Asia Pacific, and the Middle East continue to face headwinds, with China's recovery taking longer than anticipated.

Colgate-Palmolive's positive comments on European prospects and strong growth in EMEA and Asia provide a comparative point.

PG's margins have been a source of strength, driven by productivity enhancements and favorable commodity costs. The Q3 core gross margin expansion of 310 basis points and operating margin increase of 90 basis points contributed to a robust earnings beat.

Analysts expect these trends to persist, but investors will be looking for confirmation of stabilization in tomorrow's earnings call.

Guidance for FY25 will be crucial, as a solid outlook could signal that the company is weathering the inflationary storm and positioning itself for recovery. With earnings expectations at $6.97 earnings per share and $86.88 billion in revenues, any signs of optimism could boost investor confidence.

Notably, Procter & Gamble's Q4 report comes after several peers have already disclosed their quarterly results, with Church & Dwight's (CHD) upcoming release on August 1 serving as a potential benchmark for market sentiment.

As Procter & Gamble gears up for its earnings announcement, the world will be watching for signs of resilience and growth in a challenging consumer goods landscape.

While the road to recovery may be uneven, Procter & Gamble's Q4 earnings will provide a critical juncture for investors to assess the company's ability to navigate consumption trends and capitalize on its strong North American performance.

A clear demonstration of stabilization and forward-looking guidance could be the catalyst for a renewed rally in the stock.

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