Procter & Gamble Company (The)
PG · NYSE
Next quarter
Expected to report Jan 21, 2027 — estimated from last year’s reporting date.
Consensus is $1.81 EPS for Dec 2026 across 10 estimates, ranging $1.71 to $1.88.
PG Sep 2026
- 5.82%
- $1.89
- $2.00
- —
- $23.28B
Reported results
- $23.28B
- 49.83%
- $5.94B
- 25.51%
- $4.73B
- $1.97
Highlights
- EPS beat Core EPS was $2.00, up 1% year over year and 5.82% above the $1.89 consensus; GAAP diluted EPS was $1.97, versus $1.95 a year ago.
- Broad-based sales growth Net sales and organic sales each grew 4.0% to $23.28 billion, led by 2.4% volume growth, 1.1% favorable mix and 0.4% pricing; all 10 product categories and six regions grew organically.
- Margin pressure Gross margin fell 160 basis points to 49.8% and operating margin fell 70 basis points to 25.5%. Higher commodity costs and product investments more than offset productivity savings and tariff recoveries.
- Mixed market-share picture Global aggregate value share was in line with the prior year; P&G held or grew share in 29 of its top 50 category-country combinations through August.
- Full-year outlook P&G maintained organic sales growth guidance of 1%–3% and core EPS growth of 0%–3%, while updating net sales growth guidance to 2%–4%.
- Cash generation Operating cash flow was $5.77 billion and free cash flow was $4.40 billion, equivalent to 93% free-cash-flow productivity.
- Thorne acquisition P&G completed its $3.9 billion all-cash acquisition of premium wellness brand Thorne on October 1, after quarter-end; results are expected to enter the accounts in the December quarter.
Analysis
P&G delivered a sales-led quarter: organic sales rose 4.0% to $23.28 billion, with volume up 2.4%, and core EPS of $2.00 beat the $1.89 consensus by 5.82%. Sales growth broadened across all 10 product categories and six regions. Versus a year ago, net sales increased 4%, but operating income rose only 1% to $5.94 billion and net earnings attributable to P&G edged down to $4.73 billion from $4.75 billion. GAAP diluted EPS increased to $1.97 from $1.95; core EPS grew 1% to $2.00, or was flat at $1.99 on a currency-neutral basis.
The defining tension was that volume and mix supported the topline while costs constrained conversion to profit: gross margin declined 160 basis points, principally from commodities and product investments, despite manufacturing productivity savings. Health Care and Fabric & Home Care delivered sales growth with higher segment earnings, while Beauty and Baby, Feminine & Family Care earnings declined. P&G kept its organic sales and core EPS ranges, raised net sales growth guidance to 2%–4%, and flagged increasing cost headwinds. Compared with the latest earlier quarter included in the supplied history, Q3 FY26, sales were 9.6% higher and diluted EPS rose from $1.63 to $1.97; Q4 FY26 figures were not provided, so this is not an immediately sequential comparison.
Sales and margins
Organic sales growth accelerated to 4.0% from 3.5% in Q3 FY26 and 1.6% in Q1 FY26, according to the release’s reported quarterly series. The sales increase comprised 2.4% volume, 1.1% mix and 0.4% pricing. Reported net sales were $23.28 billion, up 4.0% year over year. Foreign exchange and acquisitions and divestitures had no material net effect on the company’s reported sales growth this quarter.
Profit growth lagged sales growth. Gross margin declined 160 basis points to 49.8%: 140 basis points of higher commodity costs and 140 basis points from product and packaging investments were only partly offset by 120 basis points of manufacturing productivity, 50 basis points from lower tariff costs and recoveries, and 20 basis points from pricing. SG&A was essentially flat at $5.7 billion, helping lower SG&A as a share of sales by 90 basis points. Operating income increased 1% to $5.94 billion, while operating margin declined 70 basis points to 25.5%.
Segment performance
- Beauty Organic sales grew 5.4% and segment sales rose 6% to $4.41 billion, but earnings fell 1% to $868 million. Marketing investment, commodities and mix pressured profitability; global Beauty share decreased 0.2 points.
- Grooming Organic sales rose 4.5%, with reported segment sales up 4% to $1.89 billion and earnings up 3% to $477 million. Pricing and tariff recoveries helped; global Grooming share increased 0.2 points.
- Health Care Organic sales increased 2.7% as pricing and mix offset a 2.9% volume decline. Earnings rose 9% to $783 million, supported by a 200-basis-point gross-margin improvement; Personal Health Care share gained 0.5 points while Oral Care share fell 0.6 points.
- Fabric & Home Care Organic sales rose 4.8%, driven by 4.3% volume growth, and earnings increased 3% to $1.60 billion. Commodity costs and product investment weighed on margin; Fabric Care share gained 0.4 points.
- Baby, Feminine & Family Care Organic sales grew 3.0%, but earnings declined 4% to $1.06 billion as commodities and merchandising investments pressured margin. Baby Care share gained 0.8 points, while Family Care share fell 0.5 points.
Fiscal 2027 outlook
P&G maintained its organic sales growth range of 1%–3% and core EPS growth range of 0%–3%, while updating net sales growth guidance to 2%–4%. The company expects all-in EPS growth of 1%–5%; its base-period EPS figures are $6.89 for core EPS and $6.62 for all-in EPS. The outlook includes an estimated $1.4 billion after-tax impact from higher energy, transportation and raw-material costs, plus $50 million from foreign exchange, $300 million from higher net interest expense and $150 million from lower non-operating income. Management cautioned that costs are expected to rise over the next few quarters and listed significant market-growth deceleration, currency weakness, commodity increases, geopolitical disruption and supply-chain disruption among potential risks not included in guidance.
Cash and capital
Operating cash flow was $5.77 billion, up from $5.41 billion a year earlier. After $1.37 billion of capital spending, free cash flow was $4.40 billion and free-cash-flow productivity was 93%. P&G paid $2.60 billion in dividends and repurchased $1.25 billion of shares during the quarter. For FY27, it expects more than $10 billion of dividends and approximately $5 billion of direct share repurchases, with free-cash-flow productivity guidance of 85%–90%. Cash and cash equivalents ended the quarter at $15.37 billion.
Thorne acquisition
On October 1, after the quarter ended, P&G completed its $3.9 billion all-cash acquisition of Thorne, a premium vitamins, minerals and supplements brand that will join the Personal Health Care segment. P&G said Thorne’s results are not material to the company and will be reported beginning in the quarter ending December 31, 2026. Purchase-price allocation remains preliminary.
