US consumer giant P&G has hiked its full-year growth expectations after posting double-digit organic growth in the first three months of 2022, but also warned it is facing higher costs amid soaring global inflation.

In the three months to the end of March, P&G posted net sales of $19.4bn, an increase of 7% year on year and up by 10% on an organic basis.

This organic sales increase was driven by a 3% increase in shipment volumes, 5% from increased pricing, and a 2% increase from positive geographic and product mix.

Beauty sales were up 3%, with low single-digit growth in both skin and personal care and haircare, both driven by pricing.

Grooming was up 8%, with double-digit growth in shave care thanks to pricing and positive mix as premium product sales grew.

Health was up 16%, with personal health care up 30% due to a better cold, cough and flu season as Covid restrictions were eased as well as high single-digit growth in oral care.

Fabric and home care and baby, feminine and family care were both up 10% organically.

Meanwhile, diluted net earnings per share increased by 6% to $1.33, driven by higher net sales and a reduction in shares outstanding partially offset by a slight decline in operating margin. 

“We delivered another quarter with strong sales growth and made sequential earnings growth progress despite significant and increasing cost headwinds,” said CEO Jon Moeller. 

“These results enable us to raise our top-line growth outlook for the fiscal year and to maintain our EPS guidance range. Our focus remains on the strategies of superiority, productivity, constructive disruption and continually improving P&G’s organisation and culture. These strategies have enabled us to build and sustain strong momentum. They remain the right strategies to manage through the near-term cost and operational challenges we’re facing and to deliver long-term balanced growth and value creation.”

For the full year ending July 2022, P&G raised its sales growth outlook from a range of 3%-4% to a range of 4%-5% versus the prior fiscal year.

The company also raised its guidance for organic sales growth from a range of 4%-5% to 6%-7%.

Additionally, it continues to expect core earnings per share growth for fiscal 2022 in the range of 3%-6%.

However, given increased cost and foreign exchange challenges, it now expects to be at the low end of the fiscal year core EPS growth range at 3%.

P&G said its current fiscal 2022 outlook included headwinds of $2.5bn from higher commodity costs, $400m from higher freight costs and $300m from negative foreign exchange impacts.

The $3.2bn headwind is an increase of $400m on the previous guidance provided in January, with much of this increase occurring during the current fourth quarter.

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