Procter & Gamble on Friday reported fiscal first-quarter earnings and revenue that beat analysts’ expectations, lifted by higher demand for its beauty and grooming products.
Despite higher costs from tariffs and what CEO Jon Moeller called a “challenging consumer and geopolitical environment,” P&G reiterated its forecast for all-in sales and earnings for the fiscal year, which began in July.
Here’s what the company reported for the quarter that ended on Sept. 30 compared with what Wall Street was expecting, based on a survey of analysts by LSEG:
- Earnings per share: $1.99 adjusted vs. $1.90 expected
- Revenue: $22.39 billion vs. $22.18 billion expected
P&G reported fiscal first-quarter net income attributable to the company of $4.75 billion, or $1.95 per share, up from $3.96 billion, or $1.61 per share, a year earlier.
Excluding certain items, including costs associated with incremental restructuring, the consumer giant earned $1.99 per share.
Net sales rose 3% to $22.39 billion. Organic sales — which strips out the impact of acquisitions, divestitures and foreign currency — increased 2% in the quarter.
Though revenue metrics were higher, P&G’s volume was flat compared with the year-ago period. Volume excludes pricing, which makes it a more accurate reflection of demand than sales. Like many consumer companies, P&G has seen demand for some of its products fall as inflation-weary consumers seek out deals.
‘K-shaped’ shopping
“The consumer environment is not great, but stable,” CFO Andre Schulten said on a call with media, adding that shoppers have behaved similarly in the last few quarters.
In the United States, the company’s largest market, consumption across P&G’s broad swath of products has slowed “a little bit,” according to Schulten. Like Coca-Cola, P&G is seeing a bifurcation in how consumers are shopping based on their incomes, often described as a “K-shaped” economy.
Shoppers who are less cash constrained are buying bigger pack sizes from club and online retailers, Schulten said.
“That’s their way to look for value,” he said.
But U.S. consumers living paycheck to paycheck are looking to stretch their money further by using every bottle of detergent or shampoo to the last drop and exhausting their pantry inventory before shopping for more, according to Schulten.
At the same time, private label brands are losing market share, bucking previous shopping trends during economic downturns, executives said on the company’s conference call. After the recession in 2008, P&G shifted its strategy to create more premium products that couldn’t be easily substituted with cheaper private label versions.
Boxes of Tide Pods dishwasher detergent are displayed at a Costco Wholesale store on July 12, 2025 in San Diego, California.
Kevin Carter | Getty Images News | Getty Images
P&G reported Friday that volume for both its health care and fabric and home care divisions, which include Tide and Swiffer, fell 2% during the quarter.
The company is seeing “heightened competition” in those categories, fueled by promotions and discounting from rivals, executives said on the conference call. To win back customers, P&G is focusing on innovation that can justify higher prices and convince shoppers that its products are superior. For example, Schulten said that Tide is starting shipments of its “biggest upgrade to liquid detergent in 20 years.”
The company’s baby, feminine and family care segment reported flat volume for the quarter. That division includes brands like Pampers and Tampax.
P&G’s beauty business was a bright spot. The division, which includes Olay and SK-II, reported volume growth of 4% and overall sales growth of 6%. Olay’s Super Serum line was the brand’s top performer, showing that customers were willing to pay more for premium skincare.
And P&G’s grooming business, which includes Gillette and Venus razors, saw volume rise 1% in the quarter for a sales increase of 5%.
For fiscal 2026, the company is now projecting that President Donald Trump’s tariffs will result in $400 million in after-tax costs, down from its prior outlook of $800 million. When P&G originally formulated its forecast, it included retaliatory tariffs on Canada, which have since been rescinded. As a result, the company is now planning a smaller raise in prices than it expected, Moeller said on CNBC’s “Squawk Box” on Friday morning.
However, Trump said on Thursday evening that he is terminating all trade talks with Canada over a TV ad, which could mean higher costs ahead for P&G.
P&G also reiterated its fiscal 2026 forecast of sales growth between 1% and 5% and earnings per share in the range of $6.83 to $7.09.
