P&G CEO Jon Moeller told Yahoo Finance that the company's new fiscal year guidance assumes U.S. economic growth.
"Modestly, yes," Moeller responded when asked if the consumer products giant's outlook expected the U.S. economy to grow.
The relatively upbeat guidance comes after a challenged end to its fiscal year as shoppers began to switch to private label brands to save money amid elevated inflation.
On Friday morning, P&G reported volume declines in three out of its five business lines for its fourth fiscal quarter. Volumes were unchanged in P&G's healthcare and baby businesses.
“We’ve really spent a fair amount of energy on increasing the depth of our portfolio,” Moeller said. “We're very well-positioned to be able to offer value to consumers in the way that they define it as a reflection of their personal circumstance.”
Sales rose faster than volume in all segments, reflecting P&G's recent price increases as it seeks to overcome inflation. But high inflation in areas such as commodities and transportation sent gross profit margins down 370 basis points year over year, leading to a slight miss versus Wall Street estimates on earnings.
Here is how P&G performed compared to Wall Street estimates for its fiscal quarter:
Net Sales: $19.5 billion vs. $19.4 billion
Organic Revenue Growth: +7% vs. +6.5%
Diluted EPS: $1.21 vs. $1.23
Fiscal Year Outlook
Organic Revenue Growth: +3% to +5% vs. +5.19%
Core EPS Growth: +0% to +4% vs. +5%
Shares of P&G fell more than 6% as of 11:11 p.m. ET on Friday.
P&G also asserted that inflationary pressures will remain a nagging issue moving forward.
The company sees a $3.3 billion after-tax headwind to profits in its current fiscal year due to higher prices for commodities and freight, and currency fluctuations.