Procter & Gamble raises FY23 sales growth outlook

P&G raised its guidance for fiscal 2023 all-in sales to grow approximately one percent versus the prior fiscal year, from a prior guidance range of down one percent to in-line. The Company also raised its outlook for organic sales growth to approximately six percent versus the prior fiscal year from a prior growth range of four to five percent. Foreign exchange is expected to be a five percentage point headwind to all-in sales growth for the fiscal year. P&G maintained its outlook for fiscal 2023 diluted net earnings per share growth in the range of in-line to up four percent versus fiscal 2022 EPS of $5.81. The Company added that it expects EPS results towards the lower end of the fiscal year guidance range. P&G said its current fiscal 2023 outlook includes headwinds of approximately $1.3 billion after-tax due to unfavorable foreign exchange rates and $2.2 billion due to higher commodity and material costs. Combined, these items are a $3.5 billion after-tax headwind, or approximately $1.40 per share, to fiscal 2023 earnings versus fiscal 2022, or a headwind of approximately 24 points to EPS growth. The $3.5 billion headwind is a modest sequential improvement versus the guidance provided in January, due to commodities and freight, partially offset by increased foreign exchange headwinds. Additionally, the Company expects the net impact of interest expense and interest income to be a $125 million before tax earnings headwind for fiscal year 2023. The Company is unable to reconcile its forward-looking non-GAAP cash flow measure and tax rate measures without unreasonable efforts because the Company cannot predict the timing and amounts of discrete cash items, such as acquisitions, divestitures, or impairments, which could significantly impact GAAP results. P&G expects a core effective tax rate of approximately 20% in fiscal 2023. Capital spending is now estimated to be approximately 4% of fiscal 2023 net sales. P&G continues to expect adjusted free cash flow productivity of 90% and now expects to pay around $9 billion in dividends and to repurchase $7.4 billion to $8 billion of common shares in fiscal 2023. FY23 revenue consensus $80.59B.