P&G Reports Higher Earnings Amid Challenging Environment

Cincinnati, Ohio – Procter & Gamble Co. (P&G) announced its fiscal first-quarter earnings on Friday, with results surpassing analysts’ expectations. The company attributed its success to increased demand for beauty and grooming products despite facing higher costs from tariffs and a “challenging consumer and geopolitical environment,” according to CEO Jon Moeller.

P&G’s shares rose 4% in premarket trading after the company reported net income of $4.75 billion, or $1.95 per share, for the quarter that ended September 30. This marks an increase from $3.96 billion, or $1.61 per share, during the same period last year. Excluding certain items, the earnings reached $1.99 per share.

The company’s net sales also grew by 3%, totaling $22.39 billion, while organic sales, which exclude the impact of acquisitions, divestitures, and foreign currency fluctuations, were up 2%. However, P&G saw flat volume compared to the previous year, raising concerns about consumer demand.

CFO Andre Schulten commented on the state of consumer behavior, stating, “The consumer environment is not great, but stable.” He noted that shoppers have exhibited consistent purchasing behavior over the past few quarters, although the consumption of P&G products has slowed slightly in the United States.

Schulten described a “K-shaped” economy where consumers with higher incomes are purchasing larger quantities from mass and online retailers, looking for better value. In contrast, lower-income shoppers are trying to maximize their existing supplies, such as using every last bit of a bottle of detergent or shampoo.

In the product segments, P&G reported a 2% decline in volume for its healthcare and fabric and home care divisions, which includes popular products like Tide and Swiffer. The baby, feminine, and family care segment remained flat, encompassing brands like Pampers and Tampax.

On a brighter note, P&G’s beauty division, which features brands like Olay and SK-II, experienced a volume growth of 4% and a sales increase of 6%. The grooming business, including Gillette and Venus razors, also reported volume growth of 1% and a 5% rise in sales.

Looking ahead, the company revised its forecast for fiscal 2026, now estimating that tariffs from former President Donald Trump will impose $400 million in after-tax costs, a decrease from earlier estimates of $800 million. This change is due to the removal of retaliatory tariffs on Canada. Consequently, P&G plans to raise prices less than originally anticipated, as Moeller indicated in a CNBC interview.

Despite these challenges, P&G reaffirms its sales growth projection for fiscal 2026, aiming for an increase between 1% and 5%, with earnings per share anticipated to be between $6.83 and $7.09.