News Release The Procter & Gamble Company
P&G ANNOUNCES FISCAL YEAR 2027 FIRST QUARTER RESULTS Net Sales +4.0%; Organic Sales +4.0% Diluted EPS $1.97, +1%; Core EPS $2.00, +1% UPDATES NET SALES GUIDANCE FOR THORNE ACQUISITION MAINTAINS FISCAL YEAR ORGANIC SALES, EPS GROWTH AND CASH RETURN GUIDANCE
CINCINNATI, October 22, 2026 - The Procter & Gamble Company (NYSE:PG) reported first quarter fiscal year 2027 net sales of $23.3 billion, an increase of four percent versus the prior year. Organic sales, which excludes the impacts of foreign exchange and acquisitions and divestitures, also increased four percent versus the prior year. Diluted net earnings per share were $1.97, an increase of one percent versus prior year as the increase in net sales was partially offset by an increase in operating costs. Core earnings per share were $2.00, an increase of one percent versus the prior year.
Operating cash flow was $5.8 billion, and net earnings were $4.8 billion for the quarter. Free cash flow productivity was 93%. Free cash flow productivity is calculated as operating cash flow less capital spending, as a percentage of net earnings. The Company returned $3.9 billion of cash to shareowners via $2.6 billion of dividend payments and $1.3 billion of share repurchases.
*Please refer to Exhibit 1 - Non-GAAP Measures for the definition and reconciliation of these measures to the related GAAP measures.
“Our solid sales, earnings and cash results in the first quarter reflect sharpened execution of our integrated strategy” said Shailesh Jejurikar, Chairman of the Board, President and Chief Executive Officer. “While we expect there will continue to be geopolitical and economic challenges, this strong start keeps us on track to deliver within our guidance ranges for organic sales growth, core EPS growth and free cash flow productivity for the fiscal year. We remain committed to our strategy to delight consumers with superior products at a superior value by putting the consumer first in everything we do. We are confident in the near term and excited about the future.”
Net sales in the first quarter of fiscal year 2027 were $23.3 billion, a four percent increase versus the prior year. Organic sales, which exclude the impacts of foreign exchange and acquisitions and divestitures, also increased four percent driven by a two percent increase from volume and a one percent increase from favorable mix. Pricing had a minor positive impact on sales for the quarter.
(1) Net sales percentage changes are approximations based on quantitative formulas that are consistently applied.
• Beauty segment organic sales increased five percent versus year ago. Hair Care organic sales increased mid-single digits driven by innovation-based pricing in North America and Latin America, favorable product mix and an increase in unit volume. Personal Care organic sales increased mid-single digits driven by volume growth in Greater China and Europe and favorable product mix, partially offset by trade investments. Skin Care organic sales increased mid-single digits due to favorable premium product mix and a unit volume increase in North America.
• Grooming segment organic sales increased five percent versus year ago driven by innovation-based pricing, primarily in North America and IMETA, and favorable product mix.
• Health Care segment organic sales increased three percent versus year ago. Oral Care organic sales increased low single digits driven by premium product mix and innovation-based pricing, partially offset by a unit volume decline. Personal Health Care organic sales increased low single digits due to higher pricing, primarily in North America and Latin America, and favorable product mix, partially offset by a unit volume decline.
• Fabric and Home Care segment organic sales increased five percent versus year ago. Fabric Care organic sales increased mid-single digits driven by volume increases in North America and Europe and favorable geographic mix. Home Care organic sales also increased mid-single digits driven by volume increases in North America and Europe and favorable product mix.
• Baby, Feminine and Family Care segment organic sales increased three percent versus year ago. Baby Care organic sales increased mid-single digits driven by a unit volume increase, primarily in Greater China and North America, and favorable premium product mix, partially offset by lower pricing, primarily in North America. Feminine Care organic sales increased low single digits driven by favorable product mix and innovation-based pricing, primarily in North America, partially offset by a unit volume decline in Europe. Family Care organic sales increased low single digits driven by a unit volume increase, partially offset by merchandising investments.
Diluted net earnings per share increased by one percent to $1.97. Core earnings per share increased one percent to $2.00 and Currency-neutral Core EPS was unchanged versus the prior year.
Reported gross margin for the quarter decreased 160 basis points versus the prior year. Core gross margin and currency-neutral Core gross margin for the quarter decreased 150 basis points versus the prior year and excluded the impact from incremental restructuring charges. The decrease was driven by 140 basis points of higher costs from commodities, 140 basis points of product reinvestments, 50 basis points of unfavorable mix and 10 basis points of rounding and other items, partially offset by 120 basis points of gross productivity savings, 50 basis points of tariff impact from lower costs and recognized recoveries and 20 basis points of increased pricing.
Reported selling, general and administrative expense (SG&A) as a percentage of sales declined 90 basis points versus year ago. Core SG&A as a percentage of sales decreased 80 basis points versus year ago and decreased 70 basis points on a currency-neutral basis. Core SG&A excluded the impact from incremental restructuring charges. The decline was driven by 130 basis points of productivity savings and 100 basis points of net sales growth leverage, partially offset by 120 basis points of reinvestments and 40 basis points of rounding and other items.
Reported operating margin for the quarter decreased 70 basis points versus the prior year. Excluding the impact of non-core restructuring charges, core operating margin decreased 80 basis points versus the prior year and decreased 90 basis points on a currency-neutral basis. Core operating margin included gross productivity savings of 250 basis points.
P&G updated its guidance range for fiscal 2027 all-in sales growth to be in the range of two to four percent versus the prior year, reflecting the acquisition of Thorne as of October 1, 2026. The Company maintained its outlook for organic sales growth in the range of one to three percent versus the prior year.
Included in the organic sales growth guidance is a headwind of 30 to 50 basis points from brand, product form and go-to-market discontinuations.
P&G maintained its fiscal 2027 diluted net earnings per share growth to be in the range of one to five percent versus fiscal 2026 diluted net EPS of $6.62. P&G also maintained its fiscal 2027 core earnings per share growth to be in the range of in-line to three percent versus fiscal 2026 core EPS of $6.89. This outlook equates to a range of $6.89 to $7.11 per share, with a mid-point estimate of $7.00, or an increase of approximately one and a half percent.
P&G now expects a commodity cost headwind of approximately $1.4 billion after tax driven by higher raw materials, energy and transportation costs, $300 million after-tax from higher net interest expense, $150 million after-tax from lower non-operating income and $50 million after-tax from unfavorable foreign exchange rates. Combined, these impacts equate to a headwind of $0.79 per share for fiscal 2027, or an eleven percent drag on core EPS growth.
The Company is not able to reconcile its forward-looking non-GAAP cash flow and tax rate measures without unreasonable efforts given the unpredictability of the timing and amounts of discrete items, such as acquisitions, divestitures, or impairments, which could significantly impact GAAP results.
P&G now expects a core effective tax rate to be in the range of 20% to 21% in fiscal 2027.
Capital spending is estimated to be in the range of four and a half to five and a half percent of fiscal 2027 net sales.
P&G continues to expect free cash flow productivity of 85% to 90% and expects to pay over $10 billion in dividends and to repurchase approximately $5 billion of common shares in fiscal 2027.
Certain statements in this release, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words "believe," "project," "expect," "anticipate," "estimate," "intend," "strategy," "future," "opportunity," "plan," "may," "should," "will," "would," "will be," "will continue," "will likely result" and similar expressions. Forward-looking statements are based on current expectations and assumptions, which are subject to risks and uncertainties that may cause results to differ materially from those expressed or implied in the forward-looking statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events or otherwise, except to the extent required by law.
Risks and uncertainties to which our forward-looking statements are subject include, without limitation: (1) the ability to successfully manage global financial risks, including foreign currency fluctuations, changes in global interest rates and rate differentials, currency exchange or pricing controls and tariffs; (2) the ability to successfully manage local, regional or global economic volatility, including reduced market growth rates, and to generate sufficient income and cash flow to allow the Company to effect the expected share repurchases and dividend payments; (3) the ability to successfully manage uncertainties related to changing political and geopolitical conditions and potential implications such as exchange rate fluctuations, market contraction, boycotts, variability and unpredictability in trade relations, sanctions, tariffs or other trade controls; (4) the ability to manage disruptions in credit markets or to our banking partners or changes to our credit rating; (5) the ability to maintain key manufacturing and supply arrangements (including execution of supply chain optimizations and sole supplier and sole manufacturing plant arrangements) and to manage disruption of business due to various factors, including ones outside of our control, such as natural disasters, conflicts or acts of war, terrorism or disease outbreaks; (6) the ability to successfully manage cost fluctuations and pressures, including prices of commodities and raw materials and costs of labor, transportation, energy, pensions and healthcare; (7) the ability to compete with our local and global competitors in new and existing sales channels, including by successfully responding to competitive factors such as prices, promotional incentives and trade terms for products; (8) the ability to manage and maintain key customer relationships; (9) the ability to protect our reputation and brand equity by successfully managing real or perceived issues, including concerns about safety, quality, ingredients, efficacy, packaging content, cyber incidents, supply chain practices, social or environmental practices or similar matters that may arise; (10) the ability to successfully manage the financial, legal, reputational and operational risk associated with third-party relationships, such as our suppliers, contract manufacturers,
distributors, contractors and external business partners; (11) the ability to rely on and maintain key company and third-party information and operational technology systems, networks and services and maintain the security and functionality of such systems, networks and services and the data contained therein; (12) the ability to successfully manage demand, supply and operational challenges; (13) the ability to stay on the leading edge of innovation, obtain necessary intellectual property protections and successfully respond to changing consumer habits, evolving and more fragmented digital marketing and selling platform requirements and technological advances attained by, and patents granted to, competitors; (14) the ability to successfully manage our ongoing acquisition, divestiture and joint venture activities, in each case to achieve the Company’s overall business strategy and financial objectives, without impacting the delivery of base business objectives; (15) the ability to successfully achieve productivity improvements and cost savings and manage ongoing organizational changes while successfully identifying, developing and retaining key employees, including in key growth markets where the availability of skilled or experienced employees may be limited; (16) the ability to successfully manage current and expanding regulatory and legal requirements and matters (including, without limitation, those laws, regulations, policies and related interpretations involving product liability, product and packaging composition, manufacturing processes, intellectual property, labor and employment, antitrust, privacy, cybersecurity, data protection and data transfers, artificial intelligence, tax, the environment, due diligence, risk oversight, accounting and financial reporting) and to resolve new and pending matters within current estimates; (17) the ability to manage changes in applicable tax laws and regulations; and (18) the ability to continue delivering progress towards our environmental sustainability ambitions.
For additional information concerning factors that could cause actual results and events to differ materially from those projected herein, please refer to our most recent 10-K, 10-Q and 8-K reports.
P&G serves consumers around the world with one of the strongest portfolios of trusted, quality, leadership brands, including Always®, Ambi Pur®, Ariel®, Bounty®, Charmin®, Crest®, Dawn®, Downy®, Fairy®, Febreze®, Gain®, Gillette®, Head & Shoulders®, Lenor®, Olay®, Oral-B®, Pampers®, Pantene®, SK-II®, Tide®, Vicks®, and Whisper®. The P&G community includes operations in approximately 65 countries worldwide. Please visit https://www.pg.com for the latest news and information about P&G and its brands. For other P&G news, visit us at https://www.pg.com/news. # # #
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARI… Consolidat… Earnings Information Amounts in millions except per share amounts NET SALES Cost of products sold GROSS PROFIT Selling, general and administra… expense OPERATING INCOME Interest expense Interest income Other operating income/(ex… net EARNINGS BEFORE INCOME TAXES Income taxes NET EARNINGS Less: Net earnings attributab… to 23,276 22,386 % Chg noncontrol… 11,678 10,887 4% interests 11,598 11,499 7% NET 5,661 5,643 1% EARNINGS 5,937 5,856 —% ATTRIBUTAB… (223) (197) 1% TO PROCTER 102 108 13% & GAMBLE 207 268 (6)% EFFECTIVE 6,023 6,034 (23)% TAX RATE 1,267 1,253 —% NET Three Months 4,757 4,781 1% EARNINGS Ended 26 31 (1)% PER COMMON September 30 4,731 4,750 (16)% SHARE(1) 2026 21.0 % 2025 20.8 % —% ────────────────────────────────────────────────────────────────────────────── Basic $ 2.00 $ 2.00 —% Diluted $ 1.97 $ 1.95 1% DIVIDENDS PER COMMON $ 1.0885 $ 1.0568 SHARE DILUTED WEIGHTED AVERAGE 2,407.2 2,436.8 COMMON SHARES OUTSTANDING COMPARISONS AS A % OF Basis Pt Chg NET SALES Gross 49.8% 51.4% -160 profit Selling, general and 24.3% 25.2% -90 administra… expense Operating 25.5% 26.2% -70 income Earnings before 25.9% 27.0% -110 income taxes Net 20.4% 21.4% -100 earnings Net earnings attributab… 20.3% 21.2% -90 to Procter & Gamble
(1) Basic net earnings per common share and Diluted net earnings per common share are calculated on Net earnings attributable to Procter & Gamble. Certain columns and rows may not add due to rounding.
(1) Net sales percentage changes are approximations based on quantitative formulas that are consistently applied.
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES Consolidated Statements of Cash Flows Three Months Ended September 30 Amounts in millions 2026 2025 CASH, CASH EQUIVALENTS AND RESTRICTED $ 9,942 $ 9,556 CASH, BEGINNING OF PERIOD OPERATING ACTIVITIES Net earnings 4,757 4,781 Depreciation and 810 761 amortization Share-based compensation 98 121 expense Deferred income taxes 115 53 (Gain)/loss on sale of -20 -3 assets Change in accounts -589 -305 receivable Change in inventories -349 -303 Change in accounts 1,149 648 payable Other -204 -344 TOTAL OPERATING 5,767 5,408 ACTIVITIES INVESTING ACTIVITIES Capital expenditures -1,366 -1,200 Proceeds from asset 27 8 sales Acquisitions, net of — -5 cash acquired Other investing activity -121 -338 TOTAL INVESTING -1,460 -1,535 ACTIVITIES FINANCING ACTIVITIES Dividends to -2,603 -2,549 shareholders Additions to short-term debt with original maturities of — 1,123 more than three months Reductions in short-term debt with original maturities of -157 -1,800 more than three months Net additions/(reductions) 5,758 2,108 to other short-term debt Reductions in long-term -747 -3 debt Treasury stock purchases -1,250 -1,250 Impact of stock options 143 134 and other TOTAL FINANCING 1,144 -2,239 ACTIVITIES EFFECT OF EXCHANGE RATE CHANGES ON CASH, -29 -20 CASH EQUIVALENTS AND RESTRICTED CASH CHANGE IN CASH, CASH EQUIVALENTS AND 5,423 1,615 RESTRICTED CASH CASH, CASH EQUIVALENTS AND RESTRICTED $ 15,365 $ 11,171 CASH, END OF PERIOD
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES Condensed Consolidated Amounts in September 30, Balance Sheets millions 2026 June 30, 2026 ────────────────────────────────────────────────────────────────────────────── Cash and cash $ 15,365 $ 9,942 equivalents Accounts 6,620 6,056 receivable Inventories 8,485 8,170 Prepaid expenses and other 2,038 2,040 current assets TOTAL CURRENT 32,508 26,208 ASSETS Property, plant and equipment, 25,519 25,360 net Goodwill 41,197 41,276 Trademarks and other intangible 21,359 21,444 assets, net Other noncurrent 12,549 12,231 assets TOTAL ASSETS $ 133,132 $ 126,521 Accounts payable $ 17,056 $ 16,306 Accrued and other 10,911 11,091 liabilities Debt due within 17,028 11,296 one year TOTAL CURRENT 44,996 38,694 LIABILITIES Long-term debt 21,897 22,842 Deferred income 5,949 5,760 taxes Other noncurrent 4,954 4,914 liabilities TOTAL 77,795 72,210 LIABILITIES TOTAL SHAREHOLDERS' 55,337 54,311 EQUITY TOTAL LIABILITIES AND $ 133,132 $ 126,521 SHAREHOLDERS' EQUITY
The following provides definitions of the non-GAAP measures used in Procter & Gamble's October 22, 2026 earnings release and the reconciliation to the most closely related GAAP measures. We believe that these measures provide useful perspective on underlying business trends (i.e., trends excluding non-recurring or unusual items) and results and provide a supplemental measure of period-to- period results. The non-GAAP measures described below are used by management in making operating decisions, allocating financial resources and for business strategy purposes. These measures may be useful to investors, as they provide supplemental information about business performance and provide investors a view of our business results through the eyes of management. Certain of these measures are also used to evaluate senior management and are a factor in determining their at-risk compensation. These non-GAAP measures are not intended to be considered by the user in place of the related GAAP measures but rather as supplemental information to our business results. These non-GAAP measures may not be the same as similar measures used by other companies due to possible differences in method and in the items or events being adjusted. The Company is not able to reconcile its forward-looking non-GAAP cash flow and tax rate measures because the Company cannot predict the timing and amounts of discrete items such as acquisition and divestitures, which could significantly impact GAAP results. Note that certain columns and rows may not add due to rounding.
The Core earnings measures included in the following reconciliation tables refer to the equivalent GAAP measures adjusted as applicable for the following item:
• Incremental restructuring: The Company has historically had an ongoing level of restructuring activities of approximately $250 - $500 million before tax annually. In June 2025, the Company announced a portfolio and productivity plan to streamline its portfolio and organization to improve its cost structure and competitiveness. The Company expects to incur approximately $2 billion in before-tax restructuring costs over two years and has incurred over half of the costs under this plan in fiscal 2026, with the remainder expected to be incurred in fiscal 2027. The adjustments to Core earnings include the restructuring charges that exceed the normal, recurring level of restructuring charges.
We do not view the above item to be part of our sustainable results, and their exclusion from Core earnings measures provides a more comparable measure of year-on-year results. These items are also excluded when evaluating senior management in determining their at-risk compensation.
Organic sales growth : Organic sales growth is a non-GAAP measure of sales growth excluding the impacts of acquisitions and divestitures and foreign exchange from year-over-year comparisons. We believe this measure provides investors with a supplemental understanding of underlying sales trends by
providing sales growth on a consistent basis. This measure is used in assessing the achievement of management goals for at-risk compensation.
Core EPS and Currency-neutral Core EPS: Core earnings per share, or Core EPS, is a measure of diluted net earnings per common share (diluted EPS) adjusted for items as indicated. Currency-neutral Core EPS is a measure of the Company's Core EPS excluding the incremental current year impact of foreign exchange. Management views these non-GAAP measures as useful supplemental measures of Company performance over time.
Core gross margin and Currency-neutral Core gross margin : Core gross margin is a measure of the Company's gross margin adjusted for items as indicated. Currency-neutral Core gross margin is a measure of the Company's Core gross margin excluding the incremental current year impact of foreign exchange. Management believes these non-GAAP measures provide a supplemental perspective to the Company’s operating efficiency over time.
Core selling, general and administrative (SG&A) expense as a percentage of sales and Currency-neutral Core SG&A expense as a percentage of sales : Core SG&A expense as a percentage of sales is a measure of the Company's selling, general and administrative expense as a percentage of net sales adjusted for items as indicated. Currency-neutral Core SG&A expense as a percentage of sales is a measure of the Company's Core selling, general and administrative expense as a percentage of net sales excluding the incremental current year impact of foreign exchange. Management believes these non-GAAP measures provide a supplemental perspective to the Company's operating efficiency over time.
Core operating margin and Currency-neutral Core operating margin : Core operating margin is a measure of the Company's operating margin adjusted for items as indicated. Currency-neutral Core operating margin is a measure of the Company's Core operating margin excluding the incremental current year impact of foreign exchange. Management believes these non-GAAP measures provide a supplemental perspective to the Company’s operating efficiency over time.
Free cash flow : Free cash flow is defined as operating cash flow less capital spending. Free cash flow represents the cash that the Company is able to generate after taking into account planned maintenance and asset expansion. We view free cash flow as an important measure because it is one factor used in determining the amount of cash available for dividends, share repurchases, acquisitions and other discretionary investments.
Free cash flow productivity : Free cash flow productivity is defined as the ratio of free cash flow to net earnings. We view free cash flow productivity as a useful measure to help investors understand P&G’s ability to generate cash. Free cash flow productivity is used by management in making operating decisions, in allocating financial resources and for budget planning purposes. This measure is also used in assessing the achievement of management goals for at-risk compensation. Certain columns and rows may not add due to rounding.
THE PROCTER & GAMBLE COMPANY AND SUBSID… Three Reconc… Months of Ended Non-GA… Septemb… Measur… 30, 2026 ────────────────────────────────────────────────────────────────────────────── Amounts in millio… As Increme… Core except Reported Restruc… (Non-GAA… per (GAAP) share amounts Cost of produc… $ 11,678 $ -44 $ 11,634 sold Gross 11,598 44 11,642 profit Gross 49.8 % 0.2 % 50.0 % margin Curren… impact to Core — % gross margin Curren… Core 50.0 % gross margin Sellin… general and 5,661 -54 5,607 admini… expense Sellin… general and admini… 24.3 % -0.2 % 24.1 % expense as a % of net sales Curren… impact to Core sellin… general and 0.1 % admini… expense as a % of net sales Curren… Core sellin… general and 24.2 % admini… expense as a % of net sales Operat… 5,937 98 6,035 income Operat… 25.5 % 0.4 % 25.9 % margin Curren… impact to Core -0.1 % operat… margin Curren… Core 25.8 % operat… margin Other non-op… 207 2 209 income… net Income 1,267 20 1,287 taxes Net 4,757 80 4,837 earnin… Less: Net earnin… attrib… 26 2 28 to noncon… intere… Net earnin… 4,731 77 4,808 attrib… to P&G Core EPS Diluted net earnin… $ 1.97 $ 0.03 $ 2.00 per common share(… Curren… impact $ -0.01 to Core EPS Curren… Core $ 1.99 EPS Diluted weight… average 2,407.2 common shares outsta…
(1) Diluted net earnings per common share are calculated on Net earnings attributable to Procter & Gamble.
THE PROCTER & GAMBLE COMPANY AND SUBSID… Three Reconc… Months of Ended Non-GA… Septemb… Measur… 30, 2025 ────────────────────────────────────────────────────────────────────────────── Amounts in millio… As Increme… Core except Reported Restruc… (Non-GAA… per (GAAP) share amounts Cost of produc… $ 10,887 $ -39 $ 10,848 sold Gross 11,499 39 11,537 profit Gross 51.4 % 0.1 % 51.5 % margin Curren… impact to Core 0.2 % gross margin Curren… Core 51.7 % gross margin Sellin… general and 5,643 -77 5,566 admini… expense Sellin… general and admini… 25.2 % -0.3 % 24.9 % expense as a % of net sales Curren… impact to Core sellin… general and 0.3 % admini… expense as a % of net sales Curren… Core sellin… general and 24.6 % admini… expense as a % of net sales Operat… 5,856 116 5,972 income Operat… 26.2 % 0.5 % 26.7 % margin Curren… impact to Core 0.4 % operat… margin Curren… Core 27.1 % operat… margin Other non-op… 268 7 275 income… net Income 1,253 23 1,276 taxes Net earnin… 4,750 100 4,850 attrib… to P&G Core EPS Diluted net earnin… $ 1.95 $ 0.04 $ 1.99 per common share(… Curren… impact $ — to earnin… Curren… $ 1.99 EPS Diluted weight… average 2,436.8 common shares outsta…
(1) Diluted net earnings per common share are calculated on Net earnings attributable to Procter & Gamble.
CHANGE VERSUS YEAR AGO Gross margin -160 BPS Core gross margin -150 BPS Currency-neutral Core gross margin -150 BPS Selling, general and administrative -90 BPS expense as a % of net sales Core selling, general and administrative -80 BPS expense as a % of net sales Currency-neutral Core selling, general -70 BPS and administrative as a % of net sales Operating margin -70 BPS Core operating margin -80 BPS Currency-neutral Core operating margin -90 BPS Diluted EPS 1 % Core EPS 1 % Currency-neutral Core EPS — %
July - Foreign Acquisition September Net Sales Exchange & Organic Sales 2026 Growth Impact Divestiture Growth Impact Beauty 6.4% (1.1)% —% 5.4% Grooming 4.0% 0.4% 0.2% 4.5% Health Care 3.1% (0.4)% —% 2.7% Fabric & 4.2% 0.6% —% 4.8% Home Care Baby, Feminine & 2.9% 0.1% —% 3.0% Family Care Total 4.0% —% —% 4.0% Company
Combined Foreign Total Company Net Sales Growth Exchange & Organic Sales Acquisition/Dive… Growth Impact/Other(1) FY 2027 +2% to +4% -1% +1% to +3% (Estimate)
(1) Combined Foreign Exchange & Acquisition/Divestiture Impact/Other includes foreign exchange impacts, the volume and mix impact of acquisitions and divestitures and rounding impacts necessary to reconcile net sales to organic sales.
Diluted EPS Impact of Total Company Growth Incremental Core EPS Growth Non-Core Items(1) FY 2027 +1% to +5% -1% to -2% -% to +3% (Estimate)
(1) Includes the impact of incremental non-core restructuring charges including the portfolio and productivity plan.
Full text with the tables
News Release The Procter & Gamble Company
One P&G Plaza
Cincinnati, OH 45202
P&G ANNOUNCES FISCAL YEAR 2027 FIRST QUARTER
RESULTS
Net Sales +4.0%; Organic Sales +4.0%
Diluted EPS $1.97, +1%; Core EPS $2.00, +1%
UPDATES NET SALES GUIDANCE FOR THORNE ACQUISITION
MAINTAINS FISCAL YEAR ORGANIC SALES, EPS GROWTH AND CASH RETURN GUIDANCE
CINCINNATI, October 22, 2026 - The Procter & Gamble Company (NYSE:PG) reported
first quarter fiscal year 2027 net sales of $23.3 billion, an increase of four
percent versus the prior year. Organic sales, which excludes the impacts of
foreign exchange and acquisitions and divestitures, also increased four percent
versus the prior year. Diluted net earnings per share were $1.97, an increase of
one percent versus prior year as the increase in net sales was partially offset
by an increase in operating costs. Core earnings per share were $2.00, an
increase of one percent versus the prior year.
Operating cash flow was $5.8 billion, and net earnings were $4.8 billion for the
quarter. Free cash flow productivity was 93%. Free cash flow productivity is
calculated as operating cash flow less capital spending, as a percentage of net
earnings. The Company returned $3.9 billion of cash to shareowners via $2.6
billion of dividend payments and $1.3 billion of share repurchases.
First
Quarter
($
billion…
except
EPS)
GAAP 2027 2026 % Change Non-GAA… 2027 2026 % Change
Net 23.3 22.4 4.0% Organic n/a n/a 4.0%
Sales Sales
Diluted 1.97 1.95 1% Core EPS 2.00 1.99 1%
EPS
*Please refer to Exhibit 1 - Non-GAAP Measures for the definition and
reconciliation of these measures to the related GAAP measures.
“Our solid sales, earnings and cash results in the first quarter reflect
sharpened execution of our integrated strategy” said Shailesh Jejurikar,
Chairman of the Board, President and Chief Executive Officer. “While we expect
there will continue to be geopolitical and economic challenges, this strong
start keeps us on track to deliver within our guidance ranges for organic sales
growth, core EPS growth and free cash flow productivity for the fiscal year. We
remain committed to our strategy to delight consumers with superior products at
a superior value by putting the consumer first in everything we do. We are
confident in the near term and excited about the future.”
July - September Quarter Discussion
Net sales in the first quarter of fiscal year 2027 were $23.3 billion, a four
percent increase versus the prior year. Organic sales, which exclude the impacts
of foreign exchange and acquisitions and divestitures, also increased four
percent driven by a two percent increase from volume and a one percent increase
from favorable mix. Pricing had a minor positive impact on sales for the
quarter.
July
- Volu… Fore… Price Mix A&D(… Net Organ… Orga…
Sep… Exch… Sales Volume Sales
2026
Net
Sal…
Dri…
Bea… 2.2% 1.1% 0.7% 2.5% —% 6.4% 2.2% 5.4%
Gro… (0.4… (0.4… 3.5% 1.5% (0.1… 4.0% (0.4)% 4.5%
Hea… (2.9… 0.4% 2.8% 2.8% (0.1… 3.1% (2.9)% 2.7%
Care
Fab…
& 4.3% (0.6… (0.3… 0.8% —% 4.2% 4.3% 4.8%
Home
Care
Bab…
Fem…
& 2.3% (0.1… (1.2… 1.8% —% 2.9% 2.3% 3.0%
Fam…
Care
Tot… 2.4% —% 0.4% 1.1% —% 4.0% 2.4% 4.0%
P&G
(1) Net sales percentage changes are approximations based on quantitative
formulas that are consistently applied.
(2) Acquisitions and Divestitures excluding volume impact.
• Beauty segment organic sales increased five percent versus year ago. Hair Care
organic sales increased mid-single digits driven by innovation-based pricing in
North America and Latin America, favorable product mix and an increase in unit
volume. Personal Care organic sales increased mid-single digits driven by volume
growth in Greater China and Europe and favorable product mix, partially offset
by trade investments. Skin Care organic sales increased mid-single digits due to
favorable premium product mix and a unit volume increase in North America.
• Grooming segment organic sales increased five percent versus year ago driven
by innovation-based pricing, primarily in North America and IMETA, and favorable
product mix.
• Health Care segment organic sales increased three percent versus year ago.
Oral Care organic sales increased low single digits driven by premium product
mix and innovation-based pricing, partially offset by a unit volume decline.
Personal Health Care organic sales increased low single digits due to higher
pricing, primarily in North America and Latin America, and favorable product
mix, partially offset by a unit volume decline.
• Fabric and Home Care segment organic sales increased five percent versus year
ago. Fabric Care organic sales increased mid-single digits driven by volume
increases in North America and Europe and favorable geographic mix. Home Care
organic sales also increased mid-single digits driven by volume increases in
North America and Europe and favorable product mix.
• Baby, Feminine and Family Care segment organic sales increased three percent
versus year ago. Baby Care organic sales increased mid-single digits driven by a
unit volume increase, primarily in Greater China and North America, and
favorable premium product mix, partially offset by lower pricing, primarily in
North America. Feminine Care organic sales increased low single digits driven by
favorable product mix and innovation-based pricing, primarily in North America,
partially offset by a unit volume decline in Europe. Family Care organic sales
increased low single digits driven by a unit volume increase, partially offset
by merchandising investments.
Diluted net earnings per share increased by one percent to $1.97. Core earnings
per share increased one percent to $2.00 and Currency-neutral Core EPS was
unchanged versus the prior year.
Reported gross margin for the quarter decreased 160 basis points versus the
prior year. Core gross margin and currency-neutral Core gross margin for the
quarter decreased 150 basis points versus the prior year and excluded the impact
from incremental restructuring charges. The decrease was driven by 140 basis
points of higher costs from commodities, 140 basis points of product
reinvestments, 50 basis points of unfavorable mix and 10 basis points of
rounding and other items, partially offset by 120 basis points of gross
productivity savings, 50 basis points of tariff impact from lower costs and
recognized recoveries and 20 basis points of increased pricing.
Reported selling, general and administrative expense (SG&A) as a percentage of
sales declined 90 basis points versus year ago. Core SG&A as a percentage of
sales decreased 80 basis points versus year ago and decreased 70 basis points on
a currency-neutral basis. Core SG&A excluded the impact from incremental
restructuring charges. The decline was driven by 130 basis points of
productivity savings and 100 basis points of net sales growth leverage,
partially offset by 120 basis points of reinvestments and 40 basis points of
rounding and other items.
Reported operating margin for the quarter decreased 70 basis points versus the
prior year. Excluding the impact of non-core restructuring charges, core
operating margin decreased 80 basis points versus the prior year and decreased
90 basis points on a currency-neutral basis. Core operating margin included
gross productivity savings of 250 basis points.
Fiscal Year 2027 Guidance
P&G updated its guidance range for fiscal 2027 all-in sales growth to be in the
range of two to four percent versus the prior year, reflecting the acquisition
of Thorne as of October 1, 2026. The Company maintained its outlook for organic
sales growth in the range of one to three percent versus the prior year.
Included in the organic sales growth guidance is a headwind of 30 to 50 basis
points from brand, product form and go-to-market discontinuations.
P&G maintained its fiscal 2027 diluted net earnings per share growth to be in
the range of one to five percent versus fiscal 2026 diluted net EPS of $6.62.
P&G also maintained its fiscal 2027 core earnings per share growth to be in the
range of in-line to three percent versus fiscal 2026 core EPS of $6.89. This
outlook equates to a range of $6.89 to $7.11 per share, with a mid-point
estimate of $7.00, or an increase of approximately one and a half percent.
P&G now expects a commodity cost headwind of approximately $1.4 billion after
tax driven by higher raw materials, energy and transportation costs, $300
million after-tax from higher net interest expense, $150 million after-tax from
lower non-operating income and $50 million after-tax from unfavorable foreign
exchange rates. Combined, these impacts equate to a headwind of $0.79 per share
for fiscal 2027, or an eleven percent drag on core EPS growth.
The Company is not able to reconcile its forward-looking non-GAAP cash flow and
tax rate measures without unreasonable efforts given the unpredictability of the
timing and amounts of discrete items, such as acquisitions, divestitures, or
impairments, which could significantly impact GAAP results.
P&G now expects a core effective tax rate to be in the range of 20% to 21% in
fiscal 2027.
Capital spending is estimated to be in the range of four and a half to five and
a half percent of fiscal 2027 net sales.
P&G continues to expect free cash flow productivity of 85% to 90% and expects to
pay over $10 billion in dividends and to repurchase approximately $5 billion of
common shares in fiscal 2027.
Forward-Looking Statements
Certain statements in this release, other than purely historical information,
including estimates, projections, statements relating to our business plans,
objectives and expected operating results, and the assumptions upon which those
statements are based, are "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995, Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These
forward-looking statements generally are identified by the words "believe,"
"project," "expect," "anticipate," "estimate," "intend," "strategy," "future,"
"opportunity," "plan," "may," "should," "will," "would," "will be," "will
continue," "will likely result" and similar expressions. Forward-looking
statements are based on current expectations and assumptions, which are subject
to risks and uncertainties that may cause results to differ materially from
those expressed or implied in the forward-looking statements. We undertake no
obligation to update or revise publicly any forward-looking statements, whether
because of new information, future events or otherwise, except to the extent
required by law.
Risks and uncertainties to which our forward-looking statements are subject
include, without limitation: (1) the ability to successfully manage global
financial risks, including foreign currency fluctuations, changes in global
interest rates and rate differentials, currency exchange or pricing controls and
tariffs; (2) the ability to successfully manage local, regional or global
economic volatility, including reduced market growth rates, and to generate
sufficient income and cash flow to allow the Company to effect the expected
share repurchases and dividend payments; (3) the ability to successfully manage
uncertainties related to changing political and geopolitical conditions and
potential implications such as exchange rate fluctuations, market contraction,
boycotts, variability and unpredictability in trade relations, sanctions,
tariffs or other trade controls; (4) the ability to manage disruptions in credit
markets or to our banking partners or changes to our credit rating; (5) the
ability to maintain key manufacturing and supply arrangements (including
execution of supply chain optimizations and sole supplier and sole manufacturing
plant arrangements) and to manage disruption of business due to various factors,
including ones outside of our control, such as natural disasters, conflicts or
acts of war, terrorism or disease outbreaks; (6) the ability to successfully
manage cost fluctuations and pressures, including prices of commodities and raw
materials and costs of labor, transportation, energy, pensions and healthcare;
(7) the ability to compete with our local and global competitors in new and
existing sales channels, including by successfully responding to competitive
factors such as prices, promotional incentives and trade terms for products; (8)
the ability to manage and maintain key customer relationships; (9) the ability
to protect our reputation and brand equity by successfully managing real or
perceived issues, including concerns about safety, quality, ingredients,
efficacy, packaging content, cyber incidents, supply chain practices, social or
environmental practices or similar matters that may arise; (10) the ability to
successfully manage the financial, legal, reputational and operational risk
associated with third-party relationships, such as our suppliers, contract
manufacturers,
distributors, contractors and external business partners; (11) the ability to
rely on and maintain key company and third-party information and operational
technology systems, networks and services and maintain the security and
functionality of such systems, networks and services and the data contained
therein; (12) the ability to successfully manage demand, supply and operational
challenges; (13) the ability to stay on the leading edge of innovation, obtain
necessary intellectual property protections and successfully respond to changing
consumer habits, evolving and more fragmented digital marketing and selling
platform requirements and technological advances attained by, and patents
granted to, competitors; (14) the ability to successfully manage our ongoing
acquisition, divestiture and joint venture activities, in each case to achieve
the Company’s overall business strategy and financial objectives, without
impacting the delivery of base business objectives; (15) the ability to
successfully achieve productivity improvements and cost savings and manage
ongoing organizational changes while successfully identifying, developing and
retaining key employees, including in key growth markets where the availability
of skilled or experienced employees may be limited; (16) the ability to
successfully manage current and expanding regulatory and legal requirements and
matters (including, without limitation, those laws, regulations, policies and
related interpretations involving product liability, product and packaging
composition, manufacturing processes, intellectual property, labor and
employment, antitrust, privacy, cybersecurity, data protection and data
transfers, artificial intelligence, tax, the environment, due diligence, risk
oversight, accounting and financial reporting) and to resolve new and pending
matters within current estimates; (17) the ability to manage changes in
applicable tax laws and regulations; and (18) the ability to continue delivering
progress towards our environmental sustainability ambitions.
For additional information concerning factors that could cause actual results
and events to differ materially from those projected herein, please refer to our
most recent 10-K, 10-Q and 8-K reports.
About Procter & Gamble
P&G serves consumers around the world with one of the strongest portfolios of
trusted, quality, leadership brands, including Always®, Ambi Pur®, Ariel®,
Bounty®, Charmin®, Crest®, Dawn®, Downy®, Fairy®, Febreze®, Gain®, Gillette®,
Head & Shoulders®, Lenor®, Olay®, Oral-B®, Pampers®, Pantene®, SK-II®, Tide®,
Vicks®, and Whisper®. The P&G community includes operations in approximately 65
countries worldwide. Please visit https://www.pg.com for the latest news and
information about P&G and its brands. For other P&G news, visit us at
https://www.pg.com/news.
# # #
P&G Media Contacts
:
Wendy Kennedy, 513.780.7212
Holly Stutz Smith, 513.659.9949
P&G Investor Relations Contact
:
Keri Cowan, 513.983.2414
Category: PG-IR
THE PROCTER
& GAMBLE
COMPANY AND
SUBSIDIARI…
Consolidat…
Earnings
Information
Amounts in
millions
except per
share
amounts
NET SALES
Cost of
products
sold
GROSS
PROFIT
Selling,
general and
administra…
expense
OPERATING
INCOME
Interest
expense
Interest
income
Other
operating
income/(ex…
net
EARNINGS
BEFORE
INCOME
TAXES
Income
taxes
NET
EARNINGS
Less: Net
earnings
attributab…
to 23,276 22,386 % Chg
noncontrol… 11,678 10,887 4%
interests 11,598 11,499 7%
NET 5,661 5,643 1%
EARNINGS 5,937 5,856 —%
ATTRIBUTAB… (223) (197) 1%
TO PROCTER 102 108 13%
& GAMBLE 207 268 (6)%
EFFECTIVE 6,023 6,034 (23)%
TAX RATE 1,267 1,253 —%
NET Three Months 4,757 4,781 1%
EARNINGS Ended 26 31 (1)%
PER COMMON September 30 4,731 4,750 (16)%
SHARE(1) 2026 21.0 % 2025 20.8 % —%
──────────────────────────────────────────────────────────────────────────────
Basic $ 2.00 $ 2.00 —%
Diluted $ 1.97 $ 1.95 1%
DIVIDENDS
PER COMMON $ 1.0885 $ 1.0568
SHARE
DILUTED
WEIGHTED
AVERAGE 2,407.2 2,436.8
COMMON
SHARES
OUTSTANDING
COMPARISONS
AS A % OF Basis Pt Chg
NET SALES
Gross 49.8% 51.4% -160
profit
Selling,
general and 24.3% 25.2% -90
administra…
expense
Operating 25.5% 26.2% -70
income
Earnings
before 25.9% 27.0% -110
income
taxes
Net 20.4% 21.4% -100
earnings
Net
earnings
attributab… 20.3% 21.2% -90
to Procter
&
Gamble
(1) Basic net earnings per common share and Diluted net earnings per common
share are calculated on Net earnings attributable to Procter & Gamble.
Certain columns and rows may not add due to rounding.
THE
PRO…
&
GAM…
COM… Three
AND Mont…
SUB… Ended
Con… Sept…
Ear… 30,
Inf… 2026
──────────────────────────────────────────────────────────────────────────────
% Earn… % %
Amo… Net Chan… Befo… Chan… Net Cha…
in Sales Vers… Inco… Vers… Ear… Ver…
mil… Year Taxes Year Year
Ago Ago Ago
Bea… $ 4,410 6% $ 1,1… 1% $ 868 (1)%
Gro… 1,889 4% 619 6% 477 3%
Hea… 3,318 3% 1,0… 10% 783 9%
Care
Fab…
& 8,205 4% 2,0… 4% 1,601 3%
Home
Care
Bab…
Fem…
& 5,322 3% 1,3… (4)% 1,060 (4)%
Fam…
Care
Cor… 132 N/A -234 N/A -32 N/A
Tot… $ 23,2… 4% $ 6,0… —% $ 4,757 (1)%
Com…
Three
Months
Ended
Septem…
30,
2026
──────────────────────────────────────────────────────────────────────────────
Net Organ… Foreign Net
Sales Volume Volume Exchan… Price Mix A&D(2) Sales
Drive…
Beauty 2.2% 2.2% 1.1% 0.7% 2.5% —% 6.4%
Groom… (0.4)% (0.4)% (0.4)% 3.5% 1.5% (0.1)% 4.0%
Health (2.9)% (2.9)% 0.4% 2.8% 2.8% (0.1)% 3.1%
Care
Fabric
& Home 4.3% 4.3% (0.6)% (0.3)% 0.8% —% 4.2%
Care
Baby,
Femin…
& 2.3% 2.3% (0.1)% (1.2)% 1.8% —% 2.9%
Family
Care
Total 2.4% 2.4% —% 0.4% 1.1% —% 4.0%
Compa…
(1) Net sales percentage changes are approximations based on quantitative
formulas that are consistently applied.
(2) Acquisitions and Divestitures excluding volume impact.
Certain columns and rows may not add due to rounding.
THE PROCTER & GAMBLE
COMPANY AND
SUBSIDIARIES
Consolidated Statements
of Cash Flows
Three Months Ended
September 30
Amounts in millions 2026 2025
CASH, CASH EQUIVALENTS
AND RESTRICTED $ 9,942 $ 9,556
CASH, BEGINNING OF
PERIOD
OPERATING ACTIVITIES
Net earnings 4,757 4,781
Depreciation and 810 761
amortization
Share-based compensation 98 121
expense
Deferred income taxes 115 53
(Gain)/loss on sale of -20 -3
assets
Change in accounts -589 -305
receivable
Change in inventories -349 -303
Change in accounts 1,149 648
payable
Other -204 -344
TOTAL OPERATING 5,767 5,408
ACTIVITIES
INVESTING ACTIVITIES
Capital expenditures -1,366 -1,200
Proceeds from asset 27 8
sales
Acquisitions, net of — -5
cash acquired
Other investing activity -121 -338
TOTAL INVESTING -1,460 -1,535
ACTIVITIES
FINANCING ACTIVITIES
Dividends to -2,603 -2,549
shareholders
Additions to short-term
debt with
original maturities of — 1,123
more than three
months
Reductions in short-term
debt with
original maturities of -157 -1,800
more than three
months
Net
additions/(reductions) 5,758 2,108
to other
short-term debt
Reductions in long-term -747 -3
debt
Treasury stock purchases -1,250 -1,250
Impact of stock options 143 134
and other
TOTAL FINANCING 1,144 -2,239
ACTIVITIES
EFFECT OF EXCHANGE RATE
CHANGES ON CASH, -29 -20
CASH EQUIVALENTS AND
RESTRICTED CASH
CHANGE IN CASH, CASH
EQUIVALENTS AND 5,423 1,615
RESTRICTED CASH
CASH, CASH EQUIVALENTS
AND RESTRICTED $ 15,365 $ 11,171
CASH, END OF PERIOD
Certain columns and rows may not add due to rounding.
THE PROCTER &
GAMBLE COMPANY
AND SUBSIDIARIES
Condensed
Consolidated Amounts in September 30,
Balance Sheets millions 2026 June 30, 2026
──────────────────────────────────────────────────────────────────────────────
Cash and cash $ 15,365 $ 9,942
equivalents
Accounts 6,620 6,056
receivable
Inventories 8,485 8,170
Prepaid expenses
and other 2,038 2,040
current
assets
TOTAL CURRENT 32,508 26,208
ASSETS
Property, plant
and equipment, 25,519 25,360
net
Goodwill 41,197 41,276
Trademarks and
other intangible 21,359 21,444
assets,
net
Other noncurrent 12,549 12,231
assets
TOTAL ASSETS $ 133,132 $ 126,521
Accounts payable $ 17,056 $ 16,306
Accrued and
other 10,911 11,091
liabilities
Debt due within 17,028 11,296
one year
TOTAL CURRENT 44,996 38,694
LIABILITIES
Long-term debt 21,897 22,842
Deferred income 5,949 5,760
taxes
Other noncurrent 4,954 4,914
liabilities
TOTAL 77,795 72,210
LIABILITIES
TOTAL
SHAREHOLDERS' 55,337 54,311
EQUITY
TOTAL
LIABILITIES AND $ 133,132 $ 126,521
SHAREHOLDERS'
EQUITY
Certain columns and rows may not add due to rounding.
The Procter & Gamble Company
Exhibit 1: Non-GAAP Measures
The following provides definitions of the non-GAAP measures used in Procter &
Gamble's October 22, 2026 earnings release and the reconciliation to the most
closely related GAAP measures. We believe that these measures provide useful
perspective on underlying business trends (i.e., trends excluding non-recurring
or unusual items) and results and provide a supplemental measure of period-to-
period results. The non-GAAP measures described below are used by management in
making operating decisions, allocating financial resources and for business
strategy purposes. These measures may be useful to investors, as they provide
supplemental information about business performance and provide investors a view
of our business results through the eyes of management. Certain of these
measures are also used to evaluate senior management and are a factor in
determining their at-risk compensation. These non-GAAP measures are not intended
to be considered by the user in place of the related GAAP measures but rather as
supplemental information to our business results. These non-GAAP measures may
not be the same as similar measures used by other companies due to possible
differences in method and in the items or events being adjusted. The Company is
not able to reconcile its forward-looking non-GAAP cash flow and tax rate
measures because the Company cannot predict the timing and amounts of discrete
items such as acquisition and divestitures, which could significantly impact
GAAP results. Note that certain columns and rows may not add due to rounding.
The Core earnings measures included in the following reconciliation tables refer
to the equivalent GAAP measures adjusted as applicable for the following item:
• Incremental restructuring: The Company has historically had an ongoing level
of restructuring activities of approximately $250 - $500 million before tax
annually. In June 2025, the Company announced a portfolio and productivity plan
to streamline its portfolio and organization to improve its cost structure and
competitiveness. The Company expects to incur approximately $2 billion in
before-tax restructuring costs over two years and has incurred over half of the
costs under this plan in fiscal 2026, with the remainder expected to be incurred
in fiscal 2027. The adjustments to Core earnings include the restructuring
charges that exceed the normal, recurring level of restructuring charges.
We do not view the above item to be part of our sustainable results, and their
exclusion from Core earnings measures provides a more comparable measure of
year-on-year results. These items are also excluded when evaluating senior
management in determining their at-risk compensation.
Organic sales growth : Organic sales growth is a non-GAAP measure of sales
growth excluding the impacts of acquisitions and divestitures and foreign
exchange from year-over-year comparisons. We believe this measure provides
investors with a supplemental understanding of underlying sales trends by
providing sales growth on a consistent basis. This measure is used in assessing
the achievement of management goals for at-risk compensation.
Core EPS and Currency-neutral Core EPS: Core earnings per share, or Core EPS, is
a measure of diluted net earnings per common share (diluted EPS) adjusted for
items as indicated. Currency-neutral Core EPS is a measure of the Company's Core
EPS excluding the incremental current year impact of foreign exchange.
Management views these non-GAAP measures as useful supplemental measures of
Company performance over time.
Core gross margin and Currency-neutral Core gross margin : Core gross margin is
a measure of the Company's gross margin adjusted for items as indicated.
Currency-neutral Core gross margin is a measure of the Company's Core gross
margin excluding the incremental current year impact of foreign exchange.
Management believes these non-GAAP measures provide a supplemental perspective
to the Company’s operating efficiency over time.
Core selling, general and administrative (SG&A) expense as a percentage of sales
and Currency-neutral Core SG&A expense as a percentage of sales : Core SG&A
expense as a percentage of sales is a measure of the Company's selling, general
and administrative expense as a percentage of net sales adjusted for items as
indicated. Currency-neutral Core SG&A expense as a percentage of sales is a
measure of the Company's Core selling, general and administrative expense as a
percentage of net sales excluding the incremental current year impact of foreign
exchange. Management believes these non-GAAP measures provide a supplemental
perspective to the Company's operating efficiency over time.
Core operating margin and Currency-neutral Core operating margin : Core
operating margin is a measure of the Company's operating margin adjusted for
items as indicated. Currency-neutral Core operating margin is a measure of the
Company's Core operating margin excluding the incremental current year impact of
foreign exchange. Management believes these non-GAAP measures provide a
supplemental perspective to the Company’s operating efficiency over time.
Free cash flow : Free cash flow is defined as operating cash flow less capital
spending. Free cash flow represents the cash that the Company is able to
generate after taking into account planned maintenance and asset expansion. We
view free cash flow as an important measure because it is one factor used in
determining the amount of cash available for dividends, share repurchases,
acquisitions and other discretionary investments.
Free cash flow productivity : Free cash flow productivity is defined as the
ratio of free cash flow to net earnings. We view free cash flow productivity as
a useful measure to help investors understand P&G’s ability to generate cash.
Free cash flow productivity is used by management in making operating decisions,
in allocating financial resources and for budget planning purposes. This measure
is also used in assessing the achievement of management goals for at-risk
compensation.
Certain columns and rows may not add due to rounding.
THE
PROCTER
&
GAMBLE
COMPANY
AND
SUBSID… Three
Reconc… Months
of Ended
Non-GA… Septemb…
Measur… 30, 2026
──────────────────────────────────────────────────────────────────────────────
Amounts
in
millio… As Increme… Core
except Reported Restruc… (Non-GAA…
per (GAAP)
share
amounts
Cost of
produc… $ 11,678 $ -44 $ 11,634
sold
Gross 11,598 44 11,642
profit
Gross 49.8 % 0.2 % 50.0 %
margin
Curren…
impact
to Core — %
gross
margin
Curren…
Core 50.0 %
gross
margin
Sellin…
general
and 5,661 -54 5,607
admini…
expense
Sellin…
general
and
admini… 24.3 % -0.2 % 24.1 %
expense
as a %
of net
sales
Curren…
impact
to Core
sellin…
general
and 0.1 %
admini…
expense
as a %
of net
sales
Curren…
Core
sellin…
general
and 24.2 %
admini…
expense
as a %
of net
sales
Operat… 5,937 98 6,035
income
Operat… 25.5 % 0.4 % 25.9 %
margin
Curren…
impact
to Core -0.1 %
operat…
margin
Curren…
Core 25.8 %
operat…
margin
Other
non-op… 207 2 209
income…
net
Income 1,267 20 1,287
taxes
Net 4,757 80 4,837
earnin…
Less:
Net
earnin…
attrib… 26 2 28
to
noncon…
intere…
Net
earnin… 4,731 77 4,808
attrib…
to P&G
Core EPS
Diluted
net
earnin… $ 1.97 $ 0.03 $ 2.00
per
common
share(…
Curren…
impact $ -0.01
to Core
EPS
Curren…
Core $ 1.99
EPS
Diluted
weight…
average 2,407.2
common
shares
outsta…
(1) Diluted net earnings per common share are calculated on Net earnings
attributable to Procter & Gamble.
THE
PROCTER
&
GAMBLE
COMPANY
AND
SUBSID… Three
Reconc… Months
of Ended
Non-GA… Septemb…
Measur… 30, 2025
──────────────────────────────────────────────────────────────────────────────
Amounts
in
millio… As Increme… Core
except Reported Restruc… (Non-GAA…
per (GAAP)
share
amounts
Cost of
produc… $ 10,887 $ -39 $ 10,848
sold
Gross 11,499 39 11,537
profit
Gross 51.4 % 0.1 % 51.5 %
margin
Curren…
impact
to Core 0.2 %
gross
margin
Curren…
Core 51.7 %
gross
margin
Sellin…
general
and 5,643 -77 5,566
admini…
expense
Sellin…
general
and
admini… 25.2 % -0.3 % 24.9 %
expense
as a %
of net
sales
Curren…
impact
to Core
sellin…
general
and 0.3 %
admini…
expense
as a %
of net
sales
Curren…
Core
sellin…
general
and 24.6 %
admini…
expense
as a %
of net
sales
Operat… 5,856 116 5,972
income
Operat… 26.2 % 0.5 % 26.7 %
margin
Curren…
impact
to Core 0.4 %
operat…
margin
Curren…
Core 27.1 %
operat…
margin
Other
non-op… 268 7 275
income…
net
Income 1,253 23 1,276
taxes
Net
earnin… 4,750 100 4,850
attrib…
to P&G
Core EPS
Diluted
net
earnin… $ 1.95 $ 0.04 $ 1.99
per
common
share(…
Curren…
impact $ —
to
earnin…
Curren… $ 1.99
EPS
Diluted
weight…
average 2,436.8
common
shares
outsta…
(1) Diluted net earnings per common share are calculated on Net earnings
attributable to Procter & Gamble.
CHANGE VERSUS YEAR AGO
Gross margin -160 BPS
Core gross margin -150 BPS
Currency-neutral Core gross margin -150 BPS
Selling, general and administrative -90 BPS
expense as a % of net sales
Core selling, general and administrative -80 BPS
expense as a % of net sales
Currency-neutral Core selling, general -70 BPS
and administrative as a % of net sales
Operating margin -70 BPS
Core operating margin -80 BPS
Currency-neutral Core operating margin -90 BPS
Diluted EPS 1 %
Core EPS 1 %
Currency-neutral Core EPS — %
Certain columns and rows may not add due to rounding.
Organic sales growth :
July - Foreign Acquisition
September Net Sales Exchange & Organic Sales
2026 Growth Impact Divestiture Growth
Impact
Beauty 6.4% (1.1)% —% 5.4%
Grooming 4.0% 0.4% 0.2% 4.5%
Health Care 3.1% (0.4)% —% 2.7%
Fabric & 4.2% 0.6% —% 4.8%
Home Care
Baby,
Feminine & 2.9% 0.1% —% 3.0%
Family Care
Total 4.0% —% —% 4.0%
Company
Combined Foreign
Total Company Net Sales Growth Exchange & Organic Sales
Acquisition/Dive… Growth
Impact/Other(1)
FY 2027 +2% to +4% -1% +1% to +3%
(Estimate)
(1) Combined Foreign Exchange & Acquisition/Divestiture Impact/Other includes
foreign exchange impacts, the volume and mix impact of acquisitions and
divestitures and rounding impacts necessary to reconcile net sales to organic
sales.
Core EPS growth :
Diluted EPS Impact of
Total Company Growth Incremental Core EPS Growth
Non-Core Items(1)
FY 2027 +1% to +5% -1% to -2% -% to +3%
(Estimate)
(1) Includes the impact of incremental non-core restructuring charges including
the portfolio and productivity plan.
Free cash flow (dollar amounts in millions) :
Three Months Ended September 30, 2026
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Operating Cash Flow Capital Spending Free Cash Flow
$5,767 $(1,366) $4,401
Free cash flow productivity (dollar amounts in millions) :
Three Months Ended September
30, 2026
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Free Cash Flow Net Earnings Free Cash Flow Productivity
$4,401 $4,757 93%
Certain columns and rows may not add due to rounding.