Procter & Gamble Company
Details
The company reported third-quarter adjusted earnings per share of $1.59, beating the analyst consensus estimate of $1.56. Quarterly sales of $21.235 billion (+7% year over year) outpaced the Street view of $20.516 billion.
The company returned $3.2 billion of cash to shareowners via $2.5 billion of dividend payments and over $600 million of share repurchases.
"We delivered a solid acceleration in top-line results in our fiscal third quarter, with broad-based growth across product categories and regions," said Chief Executive Officer Shailesh Jejurikar.
Organic sales rose 3%, excluding impacts from foreign exchange, acquisitions, and divestitures. A 2% increase in volume drove growth.
Higher pricing contributed an additional 1% gain. Product mix had a neutral impact on quarterly sales.
Beauty segment organic sales increased seven per cent versus the year ago, while the grooming segment organic sales increased one per cent.
The Health Care segment's organic sales increased by 2% versus the year-ago period.
Core gross margin and currency-neutral core gross margin for the quarter decreased 100 basis points versus the prior year. The decrease was driven by 180 basis points of unfavorable mix, 100 basis points of reinvestments, and 50 basis points of higher costs from tariffs.
Core operating margin for the quarter decreased 80 basis points.
Outlook
Procter & Gamble affirmed 2026 adjusted EPS guidance of $6.83 to $7.09, versus the $6.95 analyst estimate. The firm also reiterated its 2026 sales outlook of $85.127 billion to $88.498 billion, versus the $86.563 billion estimate.
P&G continues to expect a core effective tax rate to be in the range of 20% to 21% in fiscal 2026. Capital spending is estimated to be 4% to 5% of fiscal 2026 net sales.
"We're increasing investments to accelerate momentum with consumers despite the challenging geopolitical and economic environment, while still maintaining our guidance ranges for the fiscal year," the CEO added.
Earnings Call Highlights
P&G maintained its fiscal 2026 outlook but warned results are likely to skew lower within its EPS range as Middle East-related commodity, feedstock, and logistics costs add about $150 million in after-tax pressure, mostly in the fourth quarter.
"We now expect a headwind of approximately $150 million after tax for the fiscal from a combination of commodity-linked cost inflation, feedstock exposures and logistics disruptions resulting from the conflict in the Middle East," CFO Andre Schulten said.
Management said fourth-quarter organic sales growth should trail the third quarter due to Easter-related inventory timing, while innovation-led pricing and productivity remain key offsets.
Schulten said P&G will "manage some short-term pressure on the bottom line" to protect brand investment and momentum.
PG Price Action: Procter & Gamble shares were up 2.70% at $149.63 at the time of publication on Friday, according to Benzinga Pro data.
