Procter & Gamble reports USD 23.3B in Q1 FY2027 net sales

USA – Procter and Gamble has reported first-quarter fiscal year 2027 net sales of USD 23.3 billion, up 4% from the prior year. 

Diluted net earnings per share increased 1% to USD 1.97, while core earnings per share rose 1% to $2.00.

Operating cash flow reached USD 5.8 billion and net earnings totalled USD 4.8 billion. Free cash flow productivity was 93%, calculated as operating cash flow minus capital spending as a percentage of net earnings. 

P&G returned USD 3.9 billion to shareholders through USD 2.6 billion in dividends and USD 1.3 billion in share repurchases.

Shailesh Jejurikar, Chairman of the Board, President and CEO, said, “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.”

The 4% net sales increase was driven by 2% volume growth and 1% favorable product mix, with pricing contributing a minor positive effect. 

Organic sales also rose 4%.

By segment, Beauty organic sales increased 5%, supported by mid-single-digit growth in Hair Care, Personal Care, and Skin Care. 

Hair Care benefited from innovation-based pricing in North America and Latin America, favorable mix, and higher unit volume. 

Personal Care grew on volume gains in Greater China and Europe, while Skin Care was helped by premium mix and North American volume growth.

Grooming organic sales rose 5%, driven mainly by innovation-based pricing in North America and IMETA, along with favorable mix. 

Health Care organic sales increased 3%, with Oral Care and Personal Health Care both growing at low single digits despite unit volume declines.

Fabric and Home Care organic sales climbed 5%. Fabric Care and Home Care each grew at mid-single digits, supported by higher volumes in North America and Europe and favorable mix. 

Baby, Feminine and Family Care organic sales rose 3%, led by mid-single-digit Baby Care growth, particularly in Greater China and North America.

Reported gross margin fell 160 basis points year over year, while core gross margin declined 150 basis points. 

The decline reflected 140 basis points of higher commodity costs, 140 basis points of product reinvestment, and 50 basis points of unfavorable mix. 

P&G raised its fiscal 2027 all-in sales growth guidance to 2% to 4%, reflecting the acquisition of Thorne effective October 1, 2026. 

It maintained organic sales growth guidance of 1% to 3%, including a 30 to 50 basis-point headwind from brand, product form, and go-to-market discontinuations.

The company maintained diluted EPS growth guidance of 1% to 5% from fiscal 2026 diluted EPS of USD 6.62. 

Core EPS growth is expected to be in line with prior year to up 3%, implying USD 6.89 to USD 7.11 per share, with a midpoint of USD 7.00.

P&G now expects a USD 1.4 billion after-tax commodity cost headwind, along with USD 300 million from higher net interest expense, USD 150 million from lower non-operating income, and USD 50 million from unfavorable foreign exchange. 

Together, these represent a USD 0.79 per-share headwind, or an 11% drag on core EPS growth.

The company expects a core effective tax rate of 20% to 21%, capital spending of 4.5% to 5.5% of net sales, free cash flow productivity of 85% to 90%, more than USD 10 billion in dividends, and approximately USD 5 billion in share repurchases during fiscal 2027.

Sign up to receive our email newsletters with the latest news updates and insights from Africa and the World HERE.