Updated from 7:22 a.m. EDT with comments from P&G's chief financial officer.
In the face of a potential distraction in the closing on the sale of 40 underperforming beauty brands Coty (COTY) - Get Report and a challenging U.S. retail market, Procter & Gamble managed to deliver a pretty solid first fiscal quarter. The consumer products giant reported earnings of $1.03 excluding one-time items, trouncing Wall Street estimates of 98 cents. Net sales were relatively unchanged vs. the prior year at $16.5 billion, matching analysts' forecasts. Organic sales, which strip out the effects of currency, acquisitions and divestitures, rose 3% from the year-ago quarter.
"Our first-quarter results mark a good start to the fiscal year," said Chairman, President and CEO David Taylor in a statement.
Procter & Gamble saw organic sales and volumes rise in all of its segments, spurred by gains in shampoos such as Pantene and Head & Shoulders. Even the company's shaving segment, which has felt the impact of lower-cost competitors such as Unilever's recently acquired Dollar Shave Club, notched a slight sales gain likely on the back of new offerings from the Gillette brand. By major region, sales in the U.K. remained "challenging" post the country's Brexit vote, P&G Chief Financial Officer Jon Moeller said to reporters on a conference call, while sales in China rose by 2%.
Despite U.S. consumers spending cautiously ahead of the presidential election next month, sales rose a solid 3%. "We continue to improve in the U.S.," Moeller told TheStreet, pointing to P&G's renewed efforts to offer innovative new products and market them aggressively in a bid to win market share.
P&G reiterated that it expects organic sales to rise 2% this year, with earnings gaining by a mid-single digit percentage.