Procter & Gamble might continue its momentum in 2020

The Procter & Gamble Company (NYSE: PG) has taken innovation to a whole new level with its array of smart products that were on display at the Consumer Electronics Show. The products ranged from diapers to toothbrushes and razors all enabled with smart technology for a unique user experience.

It remains to be seen how these products will affect sales when they are made available in the market but for now it appears the consumer products company will have a healthy year in 2020.

Looking at the trends over the past five quarters, P&G’s net sales and organic sales have shown consistent growth. Net sales have gone from flat to up 7% while organic sales have increased in the 4-7% range.

The company’s core earnings per share has also increased consistently over this period going from single digit increases in the first three quarters of 2019 to double digits in the past two quarters. Core EPS in the first quarter of 2020 rose 22% year-over-year, aided by increases in sales and operating margin.

Turning to segments, the Beauty division has shown strong and consistent growth in both net sales and organic sales over the past five quarters, growing 8% and 10% respectively in the most recent quarter. The Grooming segment has seen weakness in net sales all through this period while organic sales have fluctuated.

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After experiencing softness in the first quarter of 2019, net sales in Health Care segment picked up, climbing as much as 20% in the first quarter of 2020. Organic sales in this division has increased consistently during this time, with a 9% growth in the most recent period.

Like the Beauty segment, the Fabric & Home Care division saw stable growth in both net and organic sales over the past five quarters. After seeing declines in the first three quarters of 2019, net sales in the Baby, Feminine & Family Care segment saw a pickup, growing 4% in the most recent quarter. Organic sales, after falling in the first quarter of last year, gained momentum and posted single digit increases over the remaining four quarters.

For fiscal year 2020, P&G has guided for a 3-5% growth in both net sales and organic sales. Core EPS is expected to increase 5-10% from fiscal year 2019. P&G’s stock has gained 32% in the past one year. The company will report its second quarter 2020 results on January 23.

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