Procter & Gamble Posts Strong Q1 Results, Maintains Guidance for Fiscal Year 2026

The Procter & Gamble Company (NYSE:PG) has released its financial results for the first quarter of fiscal year 2026, showing a solid performance that aligns closely with market expectations. The company has maintained its guidance for the fiscal year, signaling confidence in its strategic direction.

Q1 Revenue Reaches $22.4 Billion With EPS Up 21% Year Over Year

Procter & Gamble (NYSE:PG) reported a 3% increase in net sales for the first quarter of fiscal year 2026, reaching $22.4 billion, a figure that slightly surpasses the market expectation of $22.15 billion. This growth was driven by a 2% increase in organic sales, which excludes the impacts of foreign exchange, acquisitions, and divestitures. The company’s diluted earnings per share (EPS) rose to $1.95, marking a significant 21% increase from the previous year, while core EPS reached $1.99, a 3% rise that aligns with expectations.

The beauty segment was a standout performer, with organic sales increasing by 6%. This growth was attributed to innovation-driven pricing and volume increases in North America and Europe. The grooming segment also saw a 3% increase in organic sales, driven by pricing innovations and volume growth, primarily in North America and Europe. However, the health care and fabric and home care segments experienced more modest growth, with organic sales increasing by 1% and remaining flat, respectively.

Despite facing a challenging consumer and geopolitical environment, Procter & Gamble’s strong execution of its integrated strategy has kept the company on track to deliver within its guidance ranges. Operating cash flow was robust at $5.4 billion, with net earnings reaching $4.8 billion for the quarter. The company returned $3.8 billion of cash to shareholders through dividend payments and share repurchases, reflecting a commitment to shareholder value. Adjusted free cash flow productivity was an impressive 102%, highlighting the company’s efficiency in generating cash from its operations.

Join our Telegram group and never miss a breaking digital asset story.

P&G Maintains Full-Year Forecast, Expects Continued Steady Growth

Looking ahead, Procter & Gamble has maintained its guidance for fiscal year 2026. The company expects all-in sales growth to be in the range of 1% to 5% compared to the previous year, with the net impacts of foreign exchange rates and acquisitions and divestitures anticipated to provide a slight boost of approximately one percentage point to all-in sales growth. Organic sales growth is projected to be in line with or up to 4% higher than the prior year.

For fiscal 2026, Procter & Gamble expects diluted net EPS growth to range from 3% to 9%, based on the fiscal 2025 diluted net EPS of $6.51. The core EPS growth is also anticipated to be in the range of in-line to up 4% compared to fiscal 2025’s core EPS of $6.83. This guidance translates to a range of $6.83 to $7.09 per share, with a midpoint estimate of $6.96, representing a 2% increase.

The company has identified potential headwinds, including a $100 million after-tax impact from commodity costs and a $400 million after-tax impact from tariffs. Additionally, a net headwind of approximately $250 million after-tax is expected from higher net interest expenses and a higher core effective tax rate. However, favorable foreign exchange rates are projected to be a tailwind, contributing approximately $300 million after-tax.

Procter & Gamble continues to anticipate a core effective tax rate between 20% and 21% for fiscal 2026, with capital spending estimated to be around 4% to 5% of net sales. The company plans to maintain its shareholder-friendly approach by paying around $10 billion in dividends and repurchasing approximately $5 billion of common shares.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.