Procter & Gamble released its quarterly earnings report on Thursday, revealing a complex financial picture marked by declining demand for its products and a cautious outlook for the upcoming quarter, while hinting at potential price increases in the near future.
The consumer goods giant, which produces well-known brands such as Tide and Charmin, has downgraded its projections for core earnings per share and total revenue for the concluding quarter of its fiscal year. CEO Jon Moeller attributed these adjustments to new tariffs and the company’s strategic decision to reinvest in its brands amid prevailing economic uncertainties.
Despite already manufacturing much of its product line in the United States, Procter & Gamble may face increased costs due to tariffs imposed during the Trump administration.
“Price adjustments are probable, as tariffs contribute to inflation. Nonetheless, we are exploring alternative sourcing options,” Moeller stated during an appearance on Finance Newso’s “Squawk Box” on Thursday.
He indicated that any price hikes associated with these tariffs would be implemented starting in the next fiscal year, which begins in July.
Following the news, Procter & Gamble’s stock experienced a decline of over 1% in premarket trading.
In terms of performance, the company posted earnings and revenue that differed from Wall Street expectations, based on analysts’ surveys conducted by LSEG:
- Earnings per share: $1.54 vs. $1.53 expected
- Revenue: $19.78 billion vs. $20.11 billion expected
Net sales saw a decline of 2%, totaling $19.78 billion, while the company’s organic sales—a metric that excludes acquisitions, divestitures, and currency fluctuations—increased by 1%.
Overall volume decreased by 1% during the quarter, with this metric providing a clearer indication of consumer demand compared to sales figures.
The baby, feminine, and family care division experienced the most significant drop in volume, at 2%. All three categories, which encompass Pampers diapers and Bounty paper towels, reported reduced volume over the quarter.
Additionally, both the health care and fabric and home care divisions saw a 1% decline in volume, with decreased demand reported for oral care products such as Oral-B toothbrushes and Crest toothpaste, as well as home care items like Cascade detergent and Swiffer mops.
Meanwhile, the beauty segment, featuring brands like Olay and SK-II, recorded stable volume for the quarter, although P&G noted a decline in volume from Greater China, which is its second-largest market amid ongoing trade tensions with the U.S.
In contrast, the grooming division—including Gillette and Venus razors—was the sole segment to experience volume growth, with a modest increase of 1%.
As it heads into the final quarter of its fiscal year, Procter & Gamble now anticipates no growth in sales for fiscal 2025, a notable downward revision from its previous forecast of 2% to 4% growth. The company also revised its core earnings per share outlook to a range of $6.72 to $6.82, reduced from an earlier estimate of $6.91 to $7.05.
For the third quarter, Procter & Gamble reported a net income attributable to the company of $3.77 billion, or $1.54 per share, slightly up from $3.75 billion, or $1.52 per share, during the same period last year.
This story is developing. Please check back for updates.
