Procter & Gamble Co raised its full-year sales forecast on Wednesday as consumer demand for cleaning and personal healthcare products remains resilient despite rising prices, sending its shares up almost 2% in premarket trading.
Sales in its fabric and home care unit, the company's biggest segment, rose 7%, as consumers stocked up on its detergents and surface cleaning products such as Tide and Mr. Clean during the Omicron wave early in the year.
Sales at P&G's health care business, which includes brands like Oral-B and Pepto-Bismol, rose 13% in the third quarter.
Analysts noted that P&G's sales growth is the strongest in at least 15 years.
The consumer goods giant, however, warned that higher costs could dent its annual core earnings per share, which it now expects at the low-end of 3% to 6% growth that was predicted in January.
Soaring commodity and freight costs, as well as a stronger dollar are expected to dent full-year profit by $3.2 billion, compared to a prior forecast of $2.8 billion.
As P&G's price increases hit store shelves, sales "volume will become more of a pressure point," said Andre Schulten, P&G's chief financial officer.
P&G also took a hit of one penny per share in the third quarter due to the war between Russia and Ukraine, Schulten said. In its fourth quarter, the impact will be four cents, he said.
In March, P&G said it was ending all new capital investments in Russia and 'significantly reducing' its portfolio to focus on basic hygiene, health and personal care items, following Moscow's invasion of Ukraine.
Before the war, P&G's business in Russia and Ukraine represented 1.5% to 2% of its net sales and global profit, Schulten said.
The company said net sales rose 7% to $19.38 billion in the quarter ended March 31. Analysts had estimated sales of $18.73 billion, according to Refinitiv data.
Total sales volumes rose 3% despite price increases across most of P&G's product range.
The company expects fiscal 2022 sales to rise 4% to 5%, compared with its prior forecast of a 3% to 4% increase.
P&G earned $1.33 per share, beating quarterly expectation of $1.29 per share.