P&G forecasts higher profit as pandemic drives cleaning boom

FILE PHOTO: The logo for Procter & Gamble Co. is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., June 27, 2018. REUTERS/Brendan McDermid

(Reuters) - Procter & Gamble Co PG.N forecast higher profit and sales for the year on Thursday, encouraged by a surge in demand for detergent and dish soap as consumers clean their homes more often amid the coronavirus pandemic.

Shares of the world’s biggest personal care goods company rose about 2% in premarket trading after it also beat estimates for fourth-quarter revenue and profit.

The company, which sells Bounty paper towels, Charmin toilet paper, Ariel detergent and Mr. Clean surface care products, has seen a surge in demand for these products in recent months as consumers rushed to supermarkets to stock up on essentials.

Even with lockdowns easing in some parts of the world, the company has said it does not expect demand to dissipate as consumers set new standards of health and hygiene at home.

P&G forecast fiscal 2021 adjusted profit to rise between 3% to 7%, or $5.27 per to $5.48 per share, while analysts were expectatiing $5.23, according to IBES data from Refintiv.

It expects sales to grow in the range of 1% to 3%, compared with the average estimate of a 1.93% rise.

In the quarter ended June 30, P&G’s organic sales, which strip out the impact of deals and currency fluctuations, were up 6%, benefiting mainly from a 30% rise in sales of home care products.

Sales at P&G’s fabric and home care unit, its biggest business and home to Ariel and Dawn brands, increased 11% to $6.29 billion. Sales at its baby, feminine and home care unit, which makes paper towels and toilet paper, rose 3%.

Net sales rose by a better-than-expected 4% to $17.70 billion. Excluding one-time items, the company earned $1.16 per share, above the averge estimate of $1.01.

Reporting by Aishwarya Venugopal in Bengaluru; Editing by Saumyadeb Chakrabarty