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P&G raises gross sales steering as costs rise and demand for hygiene merchandise continues

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©Reuters. FILE PHOTO: The Procter & Gamble Co. logo is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, the United States, on June 27, 2018. REUTERS/Brendan McDermid

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(Reuters) – Procter & Gamble raised its full-year sales forecast on Wednesday as the consumer goods giant benefits from higher prices and a rebound in demand for cleaning products amid a surge in COVID-19 infections.

Shares of the company rose nearly 2% in premarket trading as strong quarterly sales helped cushion the blow of a stronger-than-predicted increase in annual freight and commodity costs.

Sales of fabric and home care products, including Tide and Mr. Clean, rose 7% in the second quarter as the rapid spread of the Omicron variant coronavirus prompted consumers to buy more cleaning products.

A more intense flu season also boosted organic demand for personal care products by 20%.

This, combined with price increases to offset higher merchandise and freight costs, increased net sales by 6% to $20.95 billion. Analysts had expected $20.34 billion, according to Refinitiv IBES data.

Inflationary pressures are expected to linger for a while longer, P&G's chief financial officer said after the company reported $2.8 billion in losses this year.

P&G also raised its organic revenue growth guidance for fiscal 2022 to 4% to 5% from 2% to 4% and said it would buy back $9 billion to $10 billion of stock, compared to a $7 billion previously expected to $9 billion.

P&G also softened speculation that it might be interested in buying GlaxoSmithKline's (NYSE:) consumer health business, which has attracted interest from European competitor Unilever (NYSE:).

In a CNBC interview, CEO Jon Moeller said he's "very happy with the current portfolio" and sees no need for a major acquisition.

On Saturday, GSK rejected Unilever's $68.4 billion bid for its consumer division, calling it undervalued and saying it would stick to plans for a separate listing of the company later this year.

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