P&G Half-Year Report 2024
The Procter & Gamble Company (NYSE:PG) reported second quarter fiscal year 2024 net sales of $21.4 billion, an increase of three percent versus the prior year. Organic sales, which excludes the impacts of foreign exchange and acquisitions and divestitures, increased four percent. Diluted net earnings per share were $1.40, a decrease of 12% versus prior year primarily due to a non-cash impairment of the carrying value of the Gillette intangible asset. Core net earnings per share were $1.84, an increase of 16% versus prior year.
Diluted net earnings per share decreased by 12% to $1.40, primarily due to the non-cash charge to impair the carrying value of the Gillette trade name intangible asset and higher non-core restructuring charges. Core net earnings per share increased by 16% to $1.84, driven by an increase in net sales and an increase in core operating margin. Currency-neutral core EPS were up 18% versus the prior year EPS.
Gross margin for the quarter increased 520 basis points versus the prior year, 590 basis points on a currency-neutral basis. The increase was driven by benefits of 240 basis points from gross productivity savings, 200 basis points of favorable commodity costs and 190 basis points from increased pricing. These were partially offset by 40 basis points of product reinvestments and other impacts.
Reported selling, general and administrative expenses (SG&A) as a percentage of sales increased 130 basis points versus the prior year. Core selling, general and administrative expense (SG&A) as a percentage of sales increased 120 basis points versus year ago and 110 basis points on a currency-neutral basis. The increase was driven by 290 basis points of reinvestments, partially offset by 100 basis points of productivity savings and 80 basis points of net sales growth leverage and other impacts.
Reported operating margin for the quarter decreased 230 basis points due primarily to the current period charge for the impairment of the Gillette intangible asset. Excluding this impairment and 10 basis points of non-core restructuring charges, core operating margin for the quarter increased 400 basis points versus the prior year, 470 basis points on a currency-neutral basis. Core operating margin included gross productivity savings of 340 basis points.
