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Procter & Gamble Q4 Earnings Preview: What Should Investors Expect?
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Key Takeaways
Procter & Gamble expects Q4 sales of $20.8B and EPS of $1.43, suggesting y/y rises.
PG's organic growth is driven by strong pricing, product mix and solid segment performances.
Margin gains, aided by cost savings, face headwinds from China weakness, FX and tariffs.
The Procter & Gamble Company (PG - Free Report) , also known as P&G, is set to report fourth-quarter fiscal 2025 results on July 29, before the opening bell. The company is expected to have witnessed year-over-year sales and earnings growth in the to-be-reported quarter.
The Zacks Consensus Estimate for fiscal fourth-quarter revenues is pegged at $20.8 billion, indicating a 1.4% rise from the prior-year quarter’s reported figure. The consensus mark for PG’s fiscal fourth-quarter earnings is pegged at $1.43 per share, indicating 2.1% growth from the year-ago quarter’s actual. The consensus mark for earnings has been unchanged in the past 30 days.
The Zacks Consensus Estimate for fiscal 2025 revenues is pegged at $84.2 billion, indicating a 0.2% rise from the prior-year quarter’s reported figure. The consensus mark for PG’s fiscal 2025 earnings is pegged at $6.78 per share, indicating 2.9% growth from the year-ago quarter’s actual. The consensus mark for fiscal 2025 earnings has been unchanged in the past 30 days.
PG has a trailing four-quarter earnings surprise of 1.2%, on average, including in-line earnings results in the fiscal third quarter. With this record, the question is whether PG can sustain this momentum.
PG’s Earnings Whispers
Our proven model conclusively predicts an earnings beat for Procter & Gamble this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Procter & Gamble has an Earnings ESP of +0.18% and a Zacks Rank of 3.
Key Trends to Watch Ahead of PG's Q4 Earnings
Procter & Gamble has been asserting its global market leadership by leveraging its strong brand portfolio to fuel organic sales growth. As a producer of everyday consumer goods, PG’s recent success reflects its strategic execution and brand power. These ongoing trends are expected to have supported continued organic sales growth in the fiscal fourth quarter.
PG’s organic sales for the fourth quarter and fiscal 2025 are anticipated to have benefited from strong pricing strategies, a favorable product mix and robust segmental performances. On the last reported quarter’s earnings call, management predicted organic sales growth of 2% for fiscal 2025.
Our model predicts year-over-year organic sales growth of 1.9% for PG in the fourth quarter and 2% for fiscal 2025. For the fourth quarter, our model estimates organic sales growth of 2% each for the Beauty, and the Fabric & Home Care segments, and 5% for the Health Care and Grooming segments. However, we expect organic sales for the Baby, Feminine & Family Care segment to decline 1% in the fiscal fourth quarter.
PG has been actively implementing cost-saving initiatives and productivity enhancements to strengthen margins and reinforce its competitive edge. The company's strategic focus on driving efficiency while navigating macroeconomic cost pressures has played a key role in sustaining balanced growth across both revenues and earnings. These ongoing efforts are expected to have aided margins in the to-be-reported quarter.
We expect PG's core gross margin for the fiscal fourth quarter to have been influenced by significant productivity savings, offset by the ongoing market conditions, including a volatile consumer and geopolitical landscape. Our model predicts a year-over-year core gross margin expansion of 10 bps for both fourth quarter and fiscal 2025. We expect core operating margin growth of 150 bps and 50 bps, respectively, for the fourth quarter and fiscal 2025.
Procter & Gamble Company (The) Price and EPS Surprise
However, Procter & Gamble has been navigating several challenges, including market pressures in Greater China, geopolitical tensions and currency volatility. Among these, the situation in Greater China, PG’s second-largest market, has been particularly pronounced, with a tough macroeconomic climate leading to a notable decline in consumer spending.
On the last reported quarter’s earnings call, management expected the global environment to remain volatile and challenging, relating to commodity prices, foreign currency, input costs, supply-chain disruptions, store closures, the effects of tariffs on consumers, competitors, retailers, and geopolitical dynamics.
The company’s EPS view for fiscal 2025 includes an after-tax headwind of $200 million related to unfavorable commodity costs, which equates to a headwind of 8 cents per share for fiscal 2025. The company anticipates unfavorable foreign exchange rates to create an after-tax headwind of $200 million. The unfavorable currency rates are expected to impact the core EPS by 8 cents per share. Collectively, such impacts will result in a headwind of 16 cents per share. The company also expects modest headwinds from net interest income and expenses in fiscal 2025.
Management also highlighted that it expects huge U.S. tariff impacts stemming from raw and packaging materials and certain finished products sourced from China. While China accounts for more than 10% of the overall imports to the United States, the size of the tariff rate makes the cost effect highly substantial. This view assumes tariff impacts of $100-$160 million or 3-5 cents per share on the fourth-quarter fiscal 2025 EPS.
Price Performance & Valuation
PG shares have exhibited a downtrend in the past three months, recording a decline of 2.4%. The leading consumer goods company’s shares have underperformed the industry’s fall of 2.2% and the Zacks Consumer Staples sector’s growth of 0.1%. Additionally, the stock has lagged the S&P 500’s 15.2% dip.
PG's 3-Month Stock Performance
Image Source: Zacks Investment Research
From the valuation standpoint, Procter & Gamble is trading at a forward 12-month P/E multiple of 22.44X, exceeding the industry average of 20.2X but below the S&P 500’s average of 22.88X. PG’s valuation appears quite pricey relative to the industry.
Image Source: Zacks Investment Research
Given the premium valuation, investors may face significant risks if the company's future performance does not meet expectations. The consumer goods market is becoming increasingly competitive, and Procter & Gamble’s innovation and market expansion may not suffice to drive significant growth. Macroeconomic challenges and heightened competition may impede the company's ability to sustain its current growth trajectory.
Stocks With the Favorable Combination
Here are some companies that, according to our model, have the right combination of elements to beat on earnings this reporting cycle.
Sprouts Farmers Market (SFM - Free Report) currently has an Earnings ESP of +0.27% and a Zacks Rank of 2. The company is likely to register increases in the top and bottom lines when it reports second-quarter 2025 numbers. The consensus mark for revenues is pegged at $2.2 billion, which implies growth of 14.4% from the year-ago quarter’s actual. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for SFM’s quarterly earnings has moved up a penny in the past seven days to $1.23 per share, indicating an increase of 30.9% from the prior-year quarter’s actual. Sprouts Farmers delivered an earnings surprise of 16.5% in the trailing four quarters, on average.
Altria Group (MO - Free Report) currently has an Earnings ESP of +1.03% and a Zacks Rank of 3. The company is expected to register an increase in its bottom line when it reports second-quarter 2025 numbers. The Zacks Consensus Estimate for MO’s quarterly revenues is pegged at $5.2 billion, which indicates a decline of 1.7% from the prior-year quarter’s reported figure.
The consensus mark for Altria Group’s quarterly earnings has moved up by a penny in the past 30 days to $1.37 per share. The estimate indicates growth of 4.6% from the year-ago quarter. MO delivered an earnings surprise of 1.3% in the trailing four quarters, on average.
Anheuser-Busch InBev (BUD - Free Report) , alias AB InBev, currently has an Earnings ESP of +0.37% and a Zacks Rank of 3. BUD is likely to register bottom-line growth when it reports second-quarter 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $15.3 billion, indicating a 0.01% decline from the figure in the year-ago quarter.
The consensus estimate for AB InBev’s second-quarter earnings is pegged at 94 cents per share, implying 4.4% growth from the year-earlier quarter’s actual. The consensus mark has declined 2.1% in the past 30 days. BUD delivered an earnings surprise of 10.9% in the trailing four quarters, on average.
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Procter & Gamble Q4 Earnings Preview: What Should Investors Expect?
Key Takeaways
The Procter & Gamble Company (PG - Free Report) , also known as P&G, is set to report fourth-quarter fiscal 2025 results on July 29, before the opening bell. The company is expected to have witnessed year-over-year sales and earnings growth in the to-be-reported quarter.
The Zacks Consensus Estimate for fiscal fourth-quarter revenues is pegged at $20.8 billion, indicating a 1.4% rise from the prior-year quarter’s reported figure. The consensus mark for PG’s fiscal fourth-quarter earnings is pegged at $1.43 per share, indicating 2.1% growth from the year-ago quarter’s actual. The consensus mark for earnings has been unchanged in the past 30 days.
The Zacks Consensus Estimate for fiscal 2025 revenues is pegged at $84.2 billion, indicating a 0.2% rise from the prior-year quarter’s reported figure. The consensus mark for PG’s fiscal 2025 earnings is pegged at $6.78 per share, indicating 2.9% growth from the year-ago quarter’s actual. The consensus mark for fiscal 2025 earnings has been unchanged in the past 30 days.
PG has a trailing four-quarter earnings surprise of 1.2%, on average, including in-line earnings results in the fiscal third quarter. With this record, the question is whether PG can sustain this momentum.
PG’s Earnings Whispers
Our proven model conclusively predicts an earnings beat for Procter & Gamble this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Procter & Gamble has an Earnings ESP of +0.18% and a Zacks Rank of 3.
Key Trends to Watch Ahead of PG's Q4 Earnings
Procter & Gamble has been asserting its global market leadership by leveraging its strong brand portfolio to fuel organic sales growth. As a producer of everyday consumer goods, PG’s recent success reflects its strategic execution and brand power. These ongoing trends are expected to have supported continued organic sales growth in the fiscal fourth quarter.
PG’s organic sales for the fourth quarter and fiscal 2025 are anticipated to have benefited from strong pricing strategies, a favorable product mix and robust segmental performances. On the last reported quarter’s earnings call, management predicted organic sales growth of 2% for fiscal 2025.
Our model predicts year-over-year organic sales growth of 1.9% for PG in the fourth quarter and 2% for fiscal 2025. For the fourth quarter, our model estimates organic sales growth of 2% each for the Beauty, and the Fabric & Home Care segments, and 5% for the Health Care and Grooming segments. However, we expect organic sales for the Baby, Feminine & Family Care segment to decline 1% in the fiscal fourth quarter.
PG has been actively implementing cost-saving initiatives and productivity enhancements to strengthen margins and reinforce its competitive edge. The company's strategic focus on driving efficiency while navigating macroeconomic cost pressures has played a key role in sustaining balanced growth across both revenues and earnings. These ongoing efforts are expected to have aided margins in the to-be-reported quarter.
We expect PG's core gross margin for the fiscal fourth quarter to have been influenced by significant productivity savings, offset by the ongoing market conditions, including a volatile consumer and geopolitical landscape. Our model predicts a year-over-year core gross margin expansion of 10 bps for both fourth quarter and fiscal 2025. We expect core operating margin growth of 150 bps and 50 bps, respectively, for the fourth quarter and fiscal 2025.
Procter & Gamble Company (The) Price and EPS Surprise
Procter & Gamble Company (The) price-eps-surprise | Procter & Gamble Company (The) Quote
However, Procter & Gamble has been navigating several challenges, including market pressures in Greater China, geopolitical tensions and currency volatility. Among these, the situation in Greater China, PG’s second-largest market, has been particularly pronounced, with a tough macroeconomic climate leading to a notable decline in consumer spending.
On the last reported quarter’s earnings call, management expected the global environment to remain volatile and challenging, relating to commodity prices, foreign currency, input costs, supply-chain disruptions, store closures, the effects of tariffs on consumers, competitors, retailers, and geopolitical dynamics.
The company’s EPS view for fiscal 2025 includes an after-tax headwind of $200 million related to unfavorable commodity costs, which equates to a headwind of 8 cents per share for fiscal 2025. The company anticipates unfavorable foreign exchange rates to create an after-tax headwind of $200 million. The unfavorable currency rates are expected to impact the core EPS by 8 cents per share. Collectively, such impacts will result in a headwind of 16 cents per share. The company also expects modest headwinds from net interest income and expenses in fiscal 2025.
Management also highlighted that it expects huge U.S. tariff impacts stemming from raw and packaging materials and certain finished products sourced from China. While China accounts for more than 10% of the overall imports to the United States, the size of the tariff rate makes the cost effect highly substantial. This view assumes tariff impacts of $100-$160 million or 3-5 cents per share on the fourth-quarter fiscal 2025 EPS.
Price Performance & Valuation
PG shares have exhibited a downtrend in the past three months, recording a decline of 2.4%. The leading consumer goods company’s shares have underperformed the industry’s fall of 2.2% and the Zacks Consumer Staples sector’s growth of 0.1%. Additionally, the stock has lagged the S&P 500’s 15.2% dip.
PG's 3-Month Stock Performance
Image Source: Zacks Investment Research
From the valuation standpoint, Procter & Gamble is trading at a forward 12-month P/E multiple of 22.44X, exceeding the industry average of 20.2X but below the S&P 500’s average of 22.88X. PG’s valuation appears quite pricey relative to the industry.
Image Source: Zacks Investment Research
Given the premium valuation, investors may face significant risks if the company's future performance does not meet expectations. The consumer goods market is becoming increasingly competitive, and Procter & Gamble’s innovation and market expansion may not suffice to drive significant growth. Macroeconomic challenges and heightened competition may impede the company's ability to sustain its current growth trajectory.
Stocks With the Favorable Combination
Here are some companies that, according to our model, have the right combination of elements to beat on earnings this reporting cycle.
Sprouts Farmers Market (SFM - Free Report) currently has an Earnings ESP of +0.27% and a Zacks Rank of 2. The company is likely to register increases in the top and bottom lines when it reports second-quarter 2025 numbers. The consensus mark for revenues is pegged at $2.2 billion, which implies growth of 14.4% from the year-ago quarter’s actual. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for SFM’s quarterly earnings has moved up a penny in the past seven days to $1.23 per share, indicating an increase of 30.9% from the prior-year quarter’s actual. Sprouts Farmers delivered an earnings surprise of 16.5% in the trailing four quarters, on average.
Altria Group (MO - Free Report) currently has an Earnings ESP of +1.03% and a Zacks Rank of 3. The company is expected to register an increase in its bottom line when it reports second-quarter 2025 numbers. The Zacks Consensus Estimate for MO’s quarterly revenues is pegged at $5.2 billion, which indicates a decline of 1.7% from the prior-year quarter’s reported figure.
The consensus mark for Altria Group’s quarterly earnings has moved up by a penny in the past 30 days to $1.37 per share. The estimate indicates growth of 4.6% from the year-ago quarter. MO delivered an earnings surprise of 1.3% in the trailing four quarters, on average.
Anheuser-Busch InBev (BUD - Free Report) , alias AB InBev, currently has an Earnings ESP of +0.37% and a Zacks Rank of 3. BUD is likely to register bottom-line growth when it reports second-quarter 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $15.3 billion, indicating a 0.01% decline from the figure in the year-ago quarter.
The consensus estimate for AB InBev’s second-quarter earnings is pegged at 94 cents per share, implying 4.4% growth from the year-earlier quarter’s actual. The consensus mark has declined 2.1% in the past 30 days. BUD delivered an earnings surprise of 10.9% in the trailing four quarters, on average.