We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Procter & Gamble's Q1 sales rose 3% to $22.4B, beating estimates and improving from last year.
Core EPS grew 3% to $1.99, driven by solid pricing gains and a favorable product mix.
PG reaffirmed its fiscal 2026 outlook, projecting 1-5% sales growth and steady EPS gains.
The Procter & Gamble Company (PG - Free Report) reported solid first-quarter fiscal 2026 results, with sales and earnings per share (EPS) surpassing the Zacks Consensus Estimate and improving year over year. Results benefited from growth across all segments, led by improved pricing and a favorable mix.
Procter & Gamble’s core EPS of $1.99 per share increased 3% from the year-ago quarter and beat the Zacks Consensus Estimate of $1.90. Currency-neutral core EPS also rose 3% year over year.
The company has reported net sales of $22.4 billion, up 3% year over year. Sales also surpassed the Zacks Consensus Estimate of $22.2 billion. On an organic basis (excluding the impacts of acquisitions, divestitures and foreign exchange), sales rose 2% year over year, driven by an increase of 1% each from pricing and favorable mix, while organic volume had a neutral impact in the reported quarter.
Procter & Gamble Company (The) Price, Consensus and EPS Surprise
Our model predicted year-over-year organic revenue growth of 3.2% for the first quarter of fiscal 2026, with a 1.4% gain from pricing, a 0.8% rally in the product mix and a 1% rise in the organic volume.
The company’s net sales growth for the fiscal first quarter was led by a year-over-year increase of 1% each in the Baby, Feminine & Family Care and Fabric & Home Care, 5% in Grooming, 2% in Health Care and 6% in Beauty segments. Organic sales rose 6% for the Beauty, 3% for Grooming and 1% for Health Care segments. Meanwhile, organic sales were flat for the Baby, Feminine & Family Care and Fabric & Home Care segments.
Shares of PG rose 2.5% in the pre-market session following the strong first-quarter fiscal 2026 results and a decent outlook for fiscal 2026. This Zacks Rank #4 (Sell) company’s stock has lost 3.8% in the past three months compared with the industry’s 6.2% decline.
Image Source: Zacks Investment Research
Procter & Gamble's Q1 Margins
The core gross margin declined 50 basis points (bps) year over year to 51.5%, while the reported gross margin fell 70 bps. Currency rates aided the gross margin by 0.2%. The currency-neutral core gross margin contracted 30 bps to 51.7%. Gains from gross productivity savings of 140 bps, pricing benefits of 50 bps and 20 bps from rounding and other items were more than offset by 100 bps of adverse product mix, 70 bps of product reinvestments and a 70-bps increase in costs from tariffs and commodities.
Core selling, general and administrative expenses (SG&A), as a percentage of sales, declined 40 bps from the year-ago quarter to 24.9%. The currency-neutral core SG&A rate contracted 70 bps to 24.6%. This decline was backed by 90 bps of productivity savings, 40 bps of net sales growth leverage and 10 bps of rounding and other items. These were partly offset by 70 bps of reinvestment costs.
The core operating margin was flat with the prior year at 26.7%. On a currency-neutral basis, the operating margin increased year over year by 40 bps to 27.1%, mainly aided by the positive currency effect. The operating margin included gross productivity savings of 230 bps.
We expected the core gross profit margin to decline 50 bps year over year in the fiscal first quarter to 51.5%. The core SG&A expense rate was anticipated to increase 20 bps, whereas our core operating margin projection suggested a decline of 80 bps to 25.9%.
Peek Into PG's Financials
Procter & Gamble ended first-quarter fiscal 2026 with cash and cash equivalents of $11.2 billion, long-term debt of $24.3 billion, and total shareholders’ equity of $53.6 billion.
In the first-quarter fiscal 2026, the company generated an operating cash flow of $5.4 billion. The adjusted free cash flow was $4.9 billion for the three months ended Sept. 30, 2025, with an adjusted free cash flow productivity of 102%.
Procter & Gamble returned $3.8 billion of value to its shareholders in the fiscal first quarter, including $2.55 billion in dividend payouts and $1.25 billion in share buybacks.
PG's Fiscal 2026 Guidance
For fiscal 2026, Procter & Gamble anticipates delivering another strong year of organic sales growth, core EPS growth and sturdy adjusted free cash flow productivity. Hence, the company reiterated its guidance for fiscal 2026.
The company expects year-over-year all-in sales growth of 1-5% for fiscal 2026, while organic sales are expected to be flat to up 4%. Its all-in sales are expected to include a 1% benefit from currency rates, as well as from acquisitions and divestitures.
PG envisions net EPS growth of 3-9% in fiscal 2026 compared with the fiscal 2025 GAAP EPS of $6.51. The company expects core EPS of $6.83-$7.09, suggesting flat to 4% year-over-year growth from the fiscal 2025 core EPS of $6.83. The core EPS, at a mid-point of $6.96, implies 2% year-over-year growth. PG estimates fiscal 2026 core effective tax rate of 20-21%.
The company predicts a commodity cost headwind of $100 million after tax for fiscal 2026. It also expects higher costs from tariffs of $400-million, after-tax. It anticipates an after-tax headwind of about $250 million, primarily due to modestly higher net interest expenses and an increased core effective tax rate compared to the previous year. However, this is expected to be partially offset by a favorable foreign exchange tailwind of $300 million after tax. In total, these factors are projected to represent a net headwind of roughly 19 cents per share for fiscal 2026.
Procter & Gamble expects capital expenditure to be 4-5% of net sales in fiscal 2026. Adjusted free cash flow productivity is estimated to be 85-90%. The company intends to pay out dividends worth $10 billion and repurchase shares worth $5 billion in fiscal 2026.
Newell Brands delivered a trailing four-quarter earnings surprise of 25%, on average. The Zacks Consensus Estimate for NWL’s current financial-year sales indicates a decline of 2.7% from the year-ago numbers.
PepsiCo Inc. (PEP - Free Report) is one of the leading global food and beverage companies. The company currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for PEP’s 2025 sales indicates growth of 1.7% from the previous year’s reported figures. PepsiCo has a trailing four-quarter average earnings surprise of 1.12%.
Ollie's Bargain Outlet (OLLI - Free Report) is a value retailer of brand-name merchandise at drastically reduced prices. It presently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Ollie's 2025 sales and EPS indicates growth of 16.4% and 16.5%, respectively, from the prior-year reported levels. OLLI delivered a trailing four-quarter earnings surprise of 4.2%, on average.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Procter & Gamble Q1 Earnings & Sales Beat on Solid Pricing & Mix
Key Takeaways
The Procter & Gamble Company (PG - Free Report) reported solid first-quarter fiscal 2026 results, with sales and earnings per share (EPS) surpassing the Zacks Consensus Estimate and improving year over year. Results benefited from growth across all segments, led by improved pricing and a favorable mix.
Procter & Gamble’s core EPS of $1.99 per share increased 3% from the year-ago quarter and beat the Zacks Consensus Estimate of $1.90. Currency-neutral core EPS also rose 3% year over year.
The company has reported net sales of $22.4 billion, up 3% year over year. Sales also surpassed the Zacks Consensus Estimate of $22.2 billion. On an organic basis (excluding the impacts of acquisitions, divestitures and foreign exchange), sales rose 2% year over year, driven by an increase of 1% each from pricing and favorable mix, while organic volume had a neutral impact in the reported quarter.
Procter & Gamble Company (The) Price, Consensus and EPS Surprise
Procter & Gamble Company (The) price-consensus-eps-surprise-chart | Procter & Gamble Company (The) Quote
Our model predicted year-over-year organic revenue growth of 3.2% for the first quarter of fiscal 2026, with a 1.4% gain from pricing, a 0.8% rally in the product mix and a 1% rise in the organic volume.
The company’s net sales growth for the fiscal first quarter was led by a year-over-year increase of 1% each in the Baby, Feminine & Family Care and Fabric & Home Care, 5% in Grooming, 2% in Health Care and 6% in Beauty segments. Organic sales rose 6% for the Beauty, 3% for Grooming and 1% for Health Care segments. Meanwhile, organic sales were flat for the Baby, Feminine & Family Care and Fabric & Home Care segments.
Shares of PG rose 2.5% in the pre-market session following the strong first-quarter fiscal 2026 results and a decent outlook for fiscal 2026. This Zacks Rank #4 (Sell) company’s stock has lost 3.8% in the past three months compared with the industry’s 6.2% decline.
Image Source: Zacks Investment Research
Procter & Gamble's Q1 Margins
The core gross margin declined 50 basis points (bps) year over year to 51.5%, while the reported gross margin fell 70 bps. Currency rates aided the gross margin by 0.2%. The currency-neutral core gross margin contracted 30 bps to 51.7%. Gains from gross productivity savings of 140 bps, pricing benefits of 50 bps and 20 bps from rounding and other items were more than offset by 100 bps of adverse product mix, 70 bps of product reinvestments and a 70-bps increase in costs from tariffs and commodities.
Core selling, general and administrative expenses (SG&A), as a percentage of sales, declined 40 bps from the year-ago quarter to 24.9%. The currency-neutral core SG&A rate contracted 70 bps to 24.6%. This decline was backed by 90 bps of productivity savings, 40 bps of net sales growth leverage and 10 bps of rounding and other items. These were partly offset by 70 bps of reinvestment costs.
The core operating margin was flat with the prior year at 26.7%. On a currency-neutral basis, the operating margin increased year over year by 40 bps to 27.1%, mainly aided by the positive currency effect. The operating margin included gross productivity savings of 230 bps.
We expected the core gross profit margin to decline 50 bps year over year in the fiscal first quarter to 51.5%. The core SG&A expense rate was anticipated to increase 20 bps, whereas our core operating margin projection suggested a decline of 80 bps to 25.9%.
Peek Into PG's Financials
Procter & Gamble ended first-quarter fiscal 2026 with cash and cash equivalents of $11.2 billion, long-term debt of $24.3 billion, and total shareholders’ equity of $53.6 billion.
In the first-quarter fiscal 2026, the company generated an operating cash flow of $5.4 billion. The adjusted free cash flow was $4.9 billion for the three months ended Sept. 30, 2025, with an adjusted free cash flow productivity of 102%.
Procter & Gamble returned $3.8 billion of value to its shareholders in the fiscal first quarter, including $2.55 billion in dividend payouts and $1.25 billion in share buybacks.
PG's Fiscal 2026 Guidance
For fiscal 2026, Procter & Gamble anticipates delivering another strong year of organic sales growth, core EPS growth and sturdy adjusted free cash flow productivity. Hence, the company reiterated its guidance for fiscal 2026.
The company expects year-over-year all-in sales growth of 1-5% for fiscal 2026, while organic sales are expected to be flat to up 4%. Its all-in sales are expected to include a 1% benefit from currency rates, as well as from acquisitions and divestitures.
PG envisions net EPS growth of 3-9% in fiscal 2026 compared with the fiscal 2025 GAAP EPS of $6.51. The company expects core EPS of $6.83-$7.09, suggesting flat to 4% year-over-year growth from the fiscal 2025 core EPS of $6.83. The core EPS, at a mid-point of $6.96, implies 2% year-over-year growth. PG estimates fiscal 2026 core effective tax rate of 20-21%.
The company predicts a commodity cost headwind of $100 million after tax for fiscal 2026. It also expects higher costs from tariffs of $400-million, after-tax. It anticipates an after-tax headwind of about $250 million, primarily due to modestly higher net interest expenses and an increased core effective tax rate compared to the previous year. However, this is expected to be partially offset by a favorable foreign exchange tailwind of $300 million after tax. In total, these factors are projected to represent a net headwind of roughly 19 cents per share for fiscal 2026.
Procter & Gamble expects capital expenditure to be 4-5% of net sales in fiscal 2026. Adjusted free cash flow productivity is estimated to be 85-90%. The company intends to pay out dividends worth $10 billion and repurchase shares worth $5 billion in fiscal 2026.
Here’s How Better-Ranked Stocks Fared
Newell Brands Inc. (NWL - Free Report) is a global manufacturer and marketer of consumer and commercial products. The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Newell Brands delivered a trailing four-quarter earnings surprise of 25%, on average. The Zacks Consensus Estimate for NWL’s current financial-year sales indicates a decline of 2.7% from the year-ago numbers.
PepsiCo Inc. (PEP - Free Report) is one of the leading global food and beverage companies. The company currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for PEP’s 2025 sales indicates growth of 1.7% from the previous year’s reported figures. PepsiCo has a trailing four-quarter average earnings surprise of 1.12%.
Ollie's Bargain Outlet (OLLI - Free Report) is a value retailer of brand-name merchandise at drastically reduced prices. It presently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Ollie's 2025 sales and EPS indicates growth of 16.4% and 16.5%, respectively, from the prior-year reported levels. OLLI delivered a trailing four-quarter earnings surprise of 4.2%, on average.