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Procter & Gamble stock declines on Q2 earnings

Yahoo Finance Live anchors discuss second-quarter earnings for Procter & Gamble.

Video Transcript

JARED BLIKRE: Procter & Gamble out with its latest report, posting a slight miss on profits. You can see the stock down there about 1 and 1/2%. Declining sales volume. Higher prices of its product, this is weighing on consumers. Sales volume saw its biggest quarterly drop in years, while prices increased by 10% during the quarter. And, Brad, the price increase, I think, of 10%, that consumers were able to withstand that, and that they're still seeing some organic revenue growth here is a positive.

But their projection for the full-year forecast, they're still seeing EPS growth at the low end of 0% to 4%. There were some analysts who thought they might withdraw the low end of that-- of that range. So could be 0%.

And then organic revenue they're saying for the full year 4% to 5%. They've previously saw 3% to 5%, so they're raising the low end of that. But meanwhile, the estimate was 5.21%. So the Street a little bit disappointed by this.

BRAD SMITH: Yeah, you're taking a look at some of the segment organic sales growth on the screen there. Health care remaining strong. Fabric, home care remaining strong. Beauty was up 3%. And you're talking about some of both the necessities there plus some of the little luxuries that people will continue to buy into or at least see some type of value exchange in terms of still spending some of those discretionary dollars but in things that are a mix of necessity but also something that just helps them feel a little bit better, even though perhaps they might be pinching pennies in other categories of their expenditures within the home as well.

JARED BLIKRE: You know, Brad, where they might be pinching pennies here, I'm seeing organic revenue-- which was, for the firm or for the company, up 5%. For grooming, organic sales were 0%. So maybe people just gave up grooming over the quarter. I don't know.

BRAD SMITH: Look, I mean, I've tried to lean into it a little bit more, but we have a different type of position that we're in where we have to account for that. But within some of the organic sales and even what the company is saying, organic sales increasing 3% versus a year ago. For skin and personal-care organic sales, they increased low single digits.

I think going forward from here, it's going to be important to keep track on some of those little luxury categories, but then in addition, to see what types of strategic pricing mechanisms P&G implements or continues to be cautious of knowing where the consumer may be pushing back on some of that pricing. We've seen that show up in earnings for-- or even in business updates for some of the more discretionary products, largely apparel and footwear. So when does that start to trickle even into some of the little luxuries from the cup of coffee all the way into the type of fabric softener that you might be buying at the end of the day too?

JARED BLIKRE: Yeah, I have to agree with you there. The price pressures from this year probably not going to be in the good-- from the good sector, are going to be more on the wages. So P&G may be getting a little bit of a pass from that this year, but we don't know how it's going to unfold.