The Procter & Gamble Company (PG) Q1 2026 Financial Results Summary
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The Procter & Gamble Company (PG) Q1 2026 Financial Results Summary
CINCINNATI, October 24, 2025 – The Procter & Gamble Company (NYSE: PG) reported its first quarter fiscal year 2026 financial results, showcasing a solid performance with an overall increase in net sales and earnings per share compared to the previous year.
Key Financial Metrics
- Net Sales: $22.4 billion, +3% vs. Q1 2025
- Organic Sales: +2% vs. Q1 2025
- Diluted EPS: $1.95, +21% vs. Q1 2025
- Core EPS: $1.99, +3% vs. Q1 2025
- Operating Cash Flow: $5.4 billion
- Net Earnings: $4.8 billion
- Adjusted Free Cash Flow Productivity: 102%
- Cash Returned to Shareholders: $3.8 billion (includes $2.55 billion in dividends and $1.25 billion in share repurchases)
Sales Breakdown by Segment
The organic sales growth was driven by various business segments as follows:
– Beauty:
– Sales increased by 6% (+6% organic)
– Grooming:
– Sales up by 5% (+3% organic)
– Health Care:
– Sales increased by 2% (+1% organic)
– Fabric & Home Care:
– Sales slightly up by 1% (no organic growth)
– Baby, Feminine & Family Care:
– Sales remained unchanged compared to the prior year (no organic growth)
Detailed Financial Insights
- Diluted EPS of $1.95 reflected a substantial increase, primarily impacted by lower prior-year restructuring charges.
- Core EPS increased by 3% driven by improved earnings excluding unusual items, amounting to $1.99.
- Gross Margin:
- Reported gross margin decreased by 70 basis points (bps) to 51.4%.
- Core gross margin declined by 50 bps year-on-year.
Operational Efficiency
- SG&A expenses as a percentage of sales declined by 20 bps, showing improved cost control measures.
- Operating Margin:
- Reported operating margin decreased by 50 bps to 26.2%. Core operating margin remained unchanged.
Guidance for Fiscal Year 2026
- Sales Growth Guidance: Expected to be in the range of 1% to 5% for the fiscal year.
- Organic Sales Growth: Expected in line or up to 4%.
- Diluted EPS Growth: Expected to increase between 3% and 9%, with an estimated range between $6.83 to $7.09.
- Commodity Cost Headwinds: Anticipated approximately $100 million after-tax and higher tariff costs estimated at around $400 million after-tax.
Dividend and Share Repurchase
- Dividends: Declared a quarterly dividend of $0.20 per share.
- Share Repurchases: A total of $1.25 billion worth of shares were repurchased during the quarter.
Conclusion
The results indicate Procter & Gamble’s strategic positioning in a challenging economic landscape, maintaining consistent growth in revenues and earnings. The company’s commitment to shareholder returns through dividends and share buybacks remains evident, reinforcing its financial stability. The positive trajectory in organic sales across major segments demonstrates effective management and innovative market approaches as P&G continues to focus on delivering value amidst external pressures.
Summary of Percent Changes
- Net Sales: +3%
- Organic Sales: +2%
- Diluted EPS: +21%
- Core EPS: +3%
- Gross Margin: -70 bps
- SG&A as % of Sales: -20 bps
- Operating Margin: -50 bps
- Effective Tax Rate Change: +310 bps (compared to previous year)
Consolidated Statements of Income
Amounts in millions except per share amounts
| Three Months Ended September 30 | % Chg | ||
|---|---|---|---|
| 2025 | 2024 | ||
| NET SALES | 22,386 | 21,737 | 3% |
| Cost of products sold | 10,887 | 10,421 | 3% |
| GROSS PROFIT | 11,499 | 11,316 | 2% |
| Selling, general and administrative expense | 5,643 | 5,519 | 2% |
| OPERATING INCOME | 5,856 | 5,797 | 1% |
| Interest expense | 1,253 | 1,152 | 9% |
| Interest income | 4,750 | 3,959 | 20% |
| Other operating income/(expense), net | (197) | (238) | 17% |
| EARNINGS BEFORE INCOME TAXES | 4,781 | 3,987 | 20% |
| Income taxes | 108 | 135 | -17% |
| NET EARNINGS | 4,781 | 3,987 | 20% |
| Less: Net earnings attributable to noncontrolling interests | 1,253 | 1,152 | 17% |
| NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE | 20.8% | 22.4% | -20% |
| Basic | $2.00 | $1.65 | 21% |
| Diluted | $1.95 | $1.61 | 21% |
| DIVIDENDS PER COMMON SHARE | $1.0568 | $1.0065 | 5% |
| DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | 2,436.8 | 2,466.0 | -1% |
| Gross profit | 51.4% | 52.1% | -70 BPS |
| Selling, general and administrative expense | 25.2% | 25.4% | -20 BPS |
| Operating income | 26.2% | 26.7% | -50 BPS |
| Earnings before income taxes | 27.0% | 23.6% | 340 BPS |
| Net earnings | 21.4% | 18.3% | 310 BPS |
| Net earnings attributable to Procter & Gamble | 21.2% | 18.2% | 300 BPS |
Condensed Consolidated Balance Sheets
Amounts in millions
| September 30, 2025 | June 30, 2025 | |
|---|---|---|
| Cash and cash equivalents | 11,171 | 9,556 |
| Accounts receivable | 6,487 | 6,185 |
| Inventories | 7,848 | 7,551 |
| Prepaid expenses and other current assets | 1,612 | 2,100 |
| TOTAL CURRENT ASSETS | 27,118 | 25,392 |
| Property, plant and equipment, net | 24,119 | 23,897 |
| Goodwill | 41,643 | 41,650 |
| Trademarks and other intangible assets, net | 21,818 | 21,910 |
| Other noncurrent assets | 12,901 | 12,381 |
| TOTAL ASSETS | 127,599 | 125,231 |
| Accounts payable | 15,609 | 15,227 |
| Accrued and other liabilities | 10,756 | 11,318 |
| Debt due within one year | 11,631 | 9,513 |
| TOTAL CURRENT LIABILITIES | 37,995 | 36,058 |
| Long-term debt | 24,315 | 24,995 |
| Deferred income taxes | 5,893 | 5,774 |
| Other noncurrent liabilities | 5,844 | 6,120 |
| TOTAL LIABILITIES | 74,048 | 72,946 |
| TOTAL SHAREHOLDERS’ EQUITY | 53,551 | 52,284 |
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 127,599 | 125,231 |