Procter & Gamble on Friday reported fiscal first-quarter earnings and income that beat analysts’ expectations, lifted by greater demand for its magnificence and grooming merchandise.
Regardless of greater prices from tariffs and what CEO Jon Moeller known as a “difficult client and geopolitical setting,” P&G reiterated its forecast for all-in gross sales and earnings for the fiscal yr, which started in July.
This is what the corporate reported for the quarter ended Sept. 30 in contrast with what Wall Avenue was anticipating, based mostly on a survey of analysts by LSEG:
- Earnings per share: $1.99 adjusted vs. $1.90 anticipated
- Income: $22.39 billion vs. $22.18 billion anticipated
P&G reported fiscal first-quarter web revenue attributable to the corporate of $4.75 billion, or $1.95 per share, up from $3.96 billion, or $1.61 per share, a yr earlier.
Excluding gadgets, together with prices related to incremental restructuring, the buyer large earned $1.99 per share.
Internet gross sales rose 3% to $22.39 billion. Natural gross sales, which strips out the impression of acquisitions, divestitures and international forex, elevated 2% within the quarter
Although income metrics had been greater, P&G’s quantity was flat in contrast with the year-ago interval. Quantity excludes pricing, which makes it a extra correct reflection of demand than gross sales. Like many client firms, P&G has seen demand for a few of its merchandise fall as inflation-weary shoppers search out offers.
‘Ok-shaped’ purchasing
“The buyer setting will not be nice, however secure,” CFO Andre Schulten mentioned on a name with media, including that consumers have behaved equally in the previous couple of quarters.
In the USA, the corporate’s largest market, consumption throughout P&G’s broad swath of merchandise has slowed “a bit bit,” in line with Schulten. Like Coca-Cola, P&G is seeing a bifurcation in how shoppers are purchasing based mostly on their incomes, typically described as a “Ok-shaped” economic system.
Consumers who’re much less money constrained are shopping for greater pack sizes from membership and on-line retailers, Schulten mentioned.
“That is their technique to search for worth,” he mentioned.
However U.S. shoppers dwelling paycheck to paycheck wish to stretch their cash additional by utilizing each bottle of detergent or shampoo to the final drop and exhausting their pantry stock earlier than looking for extra, in line with Schulten.
On the identical time, non-public label manufacturers are shedding market share, bucking earlier purchasing tendencies throughout financial downturns, executives mentioned on the corporate’s convention name. After the recession in 2008, P&G shifted its technique to create extra premium merchandise that could not be simply substituted with cheaper non-public label variations.
Bins of Tide Pods dishwasher detergent are displayed at a Costco Wholesale retailer on July 12, 2025 in San Diego, California.
Kevin Carter | Getty Pictures Information | Getty Pictures
P&G reported Friday that quantity for each its well being care and cloth and residential care divisions, which incorporates Tide and Swiffer, fell 2% through the quarter.
The corporate is seeing “heightened competitors” in these classes, fueled by promotions and discounting from rivals, executives mentioned on the convention name. To win again clients, P&G is specializing in innovation that may justify greater costs and persuade consumers that its merchandise are superior. For instance, Schulten mentioned that Tide is beginning shipments of its “greatest improve to liquid detergent in 20 years.”
The corporate’s child, female and household care phase reported flat quantity for the quarter. That division consists of manufacturers like Pampers and Tampax.
P&G’s magnificence enterprise was a vivid spot. The division, which incorporates Olay and SK-II, reported quantity progress of 4% and general gross sales progress of 6%. Olay’s Tremendous Serum line was the model’s prime performer, displaying that clients had been prepared to pay extra for premium skincare.
And P&G’s grooming enterprise, which incorporates Gillette and Venus razors, noticed quantity rise 1% within the quarter for a gross sales enhance of 5%.
For fiscal 2026, the corporate is now projecting that President Donald Trump’s tariffs will end in $400 million in after-tax prices, down from its prior outlook of $800 million. When P&G initially formulated its forecast, it had included retaliatory tariffs on Canada, which have since been rescinded. Consequently, the corporate is now planning to lift costs lower than anticipated, Moeller mentioned on CNBC’s “Squawk Field” on Friday morning.
Nonetheless, Trump mentioned on Thursday night that he’s terminating all commerce talks with Canada over a TV advert, which may imply greater prices forward for P&G.
P&G additionally reiterated its fiscal 2026 forecast of gross sales progress between 1% and 5% and earnings per share within the vary of $6.83 to $7.09.
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