By Scott Kanowsky
Investing.com -- Procter & Gamble Company (PG) has posted a fall in second quarter net sales, as recent strength in the U.S. dollar hit demand for the American consumer goods maker's products internationally.
Net sales, which include the effects of foreign exchange and acquisitions, dipped by 1% year-on-year to $20.8 billion in the October to December period. P&G, which generates more than half of its revenue from outside the U.S., said an "unfavorable" foreign exchange environment had a 6% impact on net sales.
But the figure was still slightly above Bloomberg consensus estimates of $20.74B.
The net sales drop, along with a slide in operating margin to 23%, contributed to diluted net earnings per share decreasing 4% to $1.59.
Shares in P&G slipped by more than 2% in U.S. pre-market trading on Thursday.
Meanwhile, organic sales, which exclude foreign exchange effects, rose by 5%, thanks to higher pricing and positive product mix that helped offset a decline in shipment volumes. The group's fabric and home care unit was one particularly strong performer, reporting better-than-expected organic sales growth of 8%.
"We delivered solid results in the second quarter of fiscal year 2023 in what continues to be a very difficult cost and operating environment," said P&G chairman, president and chief executive officer Jon Moeller in a statement.
The company behind brands like Tide detergent and Pampers baby diapers also raised its guidance for organic sales growth to a band of 4% to 5%, narrower than its prior estimate of 3% to 5%.
P&G reiterated its outlook for diluted net earnings per share expansion of between 0% to 4% as well, but said it anticipates the number will likely be at the lower end of that range "given continued significant cost headwinds from commodity and material costs and foreign exchange impacts."