Results
Net Sales +4.0%; Organic Sales +4.0%
Diluted EPS $1.97, +1%; Core EPS $2.00, +1%
Outlook
UPDATES NET SALES GUIDANCE FOR THORNE ACQUISITION MAINTAINS FISCAL YEAR ORGANIC SALES, EPS GROWTH AND CASH RETURN GUIDANCEGuidance reaffirmed
Results
CINCINNATI, October 22, 2026 - The Procter & Gamble Company (NYSE:PG) reported first quarter fiscal year 2027 net sales of $23.3 billion, an increase of four percent versus the prior year.
Organic sales, which excludes the impacts of foreign exchange and acquisitions and divestitures, also increased four percent versus the prior year.
Diluted net earnings per share were $1.97, an increase of one percent versus prior year as the increase in net sales was partially offset by an increase in operating costs.
Core earnings per share were $2.00, an increase of one percent versus the prior year.
Operating cash flow was $5.8 billion, and net earnings were $4.8 billion for the quarter.
Free cash flow productivity was 93%.
Free cash flow productivity is calculated as operating cash flow less capital spending, as a percentage of net earnings.
The Company returned $3.9 billion of cash to shareowners via $2.6 billion of dividend payments and $1.3 billion of share repurchases.
Management commentary
“Our solid sales, earnings and cash results in the first quarter reflect sharpened execution of our integrated strategy” said Shailesh Jejurikar, Chairman of the Board, President and Chief Executive Officer.
“While we expect there will continue to be geopolitical and economic challenges, this strong start keeps us on track to deliver within our guidance ranges for organic sales growth, core EPS growth and free cash flow productivity for the fiscal year.Guidance reaffirmed
We remain committed to our strategy to delight consumers with superior products at a superior value by putting the consumer first in everything we do.
We are confident in the near term and excited about the future.”
Results
July - September Quarter Discussion
3Net sales in the first quarter of fiscal year 2027 were $23.3 billion, a four percent increase versus the prior year.
7Organic sales, which exclude the impacts of foreign exchange and acquisitions and divestitures, also increased four percent driven by a two percent increase from volume and a one percent increase from favorable mix.
Pricing had a minor positive impact on sales for the quarter.
Corporate events
(2) Acquisitions and Divestitures excluding volume impact.
Results
Beauty segment organic sales increased five percent versus year ago.
Hair Care organic sales increased mid-single digits driven by innovation-based pricing in North America and Latin America, favorable product mix and an increase in unit volume.
Personal Care organic sales increased mid-single digits driven by volume growth in Greater China and Europe and favorable product mix, partially offset by trade investments.
Skin Care organic sales increased mid-single digits due to favorable premium product mix and a unit volume increase in North America.
5Grooming segment organic sales increased five percent versus year ago driven by innovation-based pricing, primarily in North America and IMETA, and favorable product mix.
Health Care segment organic sales increased three percent versus year ago.
Oral Care organic sales increased low single digits driven by premium product mix and innovation-based pricing, partially offset by a unit volume decline.
Personal Health Care organic sales increased low single digits due to higher pricing, primarily in North America and Latin America, and favorable product mix, partially offset by a unit volume decline.
Fabric and Home Care segment organic sales increased five percent versus year ago.
Fabric Care organic sales increased mid-single digits driven by volume increases in North America and Europe and favorable geographic mix.
Home Care organic sales also increased mid-single digits driven by volume increases in North America and Europe and favorable product mix.
Baby, Feminine and Family Care segment organic sales increased three percent versus year ago.
Baby Care organic sales increased mid-single digits driven by a unit volume increase, primarily in Greater China and North America, and favorable premium product mix, partially offset by lower pricing, primarily in North America.
Feminine Care organic sales increased low single digits driven by favorable product mix and innovation-based pricing, primarily in North America, partially offset by a unit volume decline in Europe.
Family Care organic sales increased low single digits driven by a unit volume increase, partially offset by merchandising investments.
Diluted net earnings per share increased by one percent to $1.97.
Core earnings per share increased one percent to $2.00 and Currency-neutral Core EPS was unchanged versus the prior year.
Reported gross margin for the quarter decreased 160 basis points versus the prior year.
Core gross margin and currency-neutral Core gross margin for the quarter decreased 150 basis points versus the prior year and excluded the impact from incremental restructuring charges.
The decrease was driven by 140 basis points of higher costs from commodities, 140 basis points of product reinvestments, 50 basis points of unfavorable mix and 10 basis points of rounding and other items, partially offset by 120 basis points of gross productivity savings, 50 basis points of tariff impact from lower costs and recognized recoveries and 20 basis points of increased pricing.
Reported selling, general and administrative expense (SG&A) as a percentage of sales declined 90 basis points versus year ago.
Core SG&A as a percentage of sales decreased 80 basis points versus year ago and decreased 70 basis points on a currency-neutral basis.
Core SG&A excluded the impact from incremental restructuring charges.
8The decline was driven by 130 basis points of productivity savings and 100 basis points of net sales growth leverage, partially offset by 120 basis points of reinvestments and 40 basis points of rounding and other items.
Reported operating margin for the quarter decreased 70 basis points versus the prior year.
6Excluding the impact of non-core restructuring charges, core operating margin decreased 80 basis points versus the prior year and decreased 90 basis points on a currency-neutral basis.
Core operating margin included gross productivity savings of 250 basis points.
Outlook
Fiscal Year 2027 Guidance
4P&G updated its guidance range for fiscal 2027 all-in sales growth to be in the range of two to four percent versus the prior year, reflecting the acquisition of Thorne as of October 1, 2026.
The Company maintained its outlook for organic sales growth in the range of one to three percent versus the prior year.Guidance reaffirmed
Included in the organic sales growth guidance is a headwind of 30 to 50 basis points from brand, product form and go-to-market discontinuations.
P&G maintained its fiscal 2027 diluted net earnings per share growth to be in the range of one to five percent versus fiscal 2026 diluted net EPS of $6.62.Guidance reaffirmed
P&G also maintained its fiscal 2027 core earnings per share growth to be in the range of in-line to three percent versus fiscal 2026 core EPS of $6.89.Guidance reaffirmed
This outlook equates to a range of $6.89 to $7.11 per share, with a mid-point estimate of $7.00, or an increase of approximately one and a half percent.
1P&G now expects a commodity cost headwind of approximately $1.4 billion after tax driven by higher raw materials, energy and transportation costs, $300 million after-tax from higher net interest expense, $150 million after-tax from lower non-operating income and $50 million after-tax from unfavorable foreign exchange rates.Guidance lowered
2Combined, these impacts equate to a headwind of $0.79 per share for fiscal 2027, or an eleven percent drag on core EPS growth.Guidance lowered
P&G now expects a core effective tax rate to be in the range of 20% to 21% in fiscal 2027.
Capital spending is estimated to be in the range of four and a half to five and a half percent of fiscal 2027 net sales.
P&G continues to expect free cash flow productivity of 85% to 90% and expects to pay over $10 billion in dividends and to repurchase approximately $5 billion of common shares in fiscal 2027.
Results
Gross margin(160)BPS
Core gross margin(150)BPS
Currency-neutral Core gross margin(150)BPS
Selling, general and administrative expense as a % of net sales(90)BPS
Core selling, general and administrative expense as a % of net sales(80)BPS
Currency-neutral Core selling, general and administrative as a % of net sales(70)BPS
Operating margin(70)BPS
Core operating margin(80)BPS
Currency-neutral Core operating margin(90)BPS
Diluted EPS1%
Core EPS1%
Currency-neutral Core EPS%
Organic sales growth :
Total CompanyNet Sales GrowthCombined Foreign Exchange & Acquisition/Divestiture Impact/Other (1)Organic Sales Growth
Outlook
FY 2027 (Estimate)+2% to +4%-1%+1% to +3%
Results
Core EPS growth :
Total CompanyDiluted EPS GrowthImpact of Incremental Non-Core Items (1)Core EPS Growth
Outlook
FY 2027 (Estimate)+1% to +5%-1% to -2%-% to +3%
Results
Three Months Ended September 30, 2026
Operating Cash FlowCapital SpendingFree Cash Flow
Free Cash FlowNet EarningsFree Cash Flow Productivity
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