Procter & Gamble Company (NYSE:PG) stock fell Thursday after the consumer goods giant posted mixed quarterly results.
The company reported second-quarter adjusted earnings per share of $1.88, beating the analyst consensus estimate of $1.86.
Quarterly sales of $22.208 billion missed the Street view of $22.282 billion.
Net sales increased 1% year over year, while organic sales were flat at 0%.
Segment Performance
Organic sales rose in Beauty, with strength in Hair, Personal, and Skin Care driven by innovation-led pricing, volume gains, and premium mix, partly offset by geographic and volume pressures.
Grooming sales were flat as pricing gains in North America and Europe were offset by volume declines.
Health Care posted organic growth, led by modest gains in Oral and Personal Health Care from pricing and premium mix, despite volume and mix headwinds.
Fabric and Home Care were flat overall, while Baby, Feminine and Family Care declined, pressured by volume weakness and tough prior-year comparisons.
Margins Under Pressure
The firm’s reported gross margin for the quarter decreased 120 basis points versus the prior year. Core gross margin for the quarter decreased 50 basis points versus the prior year and, on a currency-neutral basis, decreased 30 basis points.
In the quarter under review, the reported operating margin decreased 200 basis points versus the prior year. Core operating margin for the quarter decreased 70 basis points versus the prior year and decreased 80 basis points on a currency-neutral basis.
Procter & Gamble exited the quarter with cash and equivalents worth $10.825 billion, higher than $9.556 billion as of June 30, 2025.
Long-term debt as of December 31, 2025, was $25.577 billion, higher than $24.995 billion as of June 30, 2025.
CFO Sees Turnaround Ahead
Procter & Gamble CFO Andre Schulten said the company expects sales to rebound over the next six months after what he described as the “softest quarter of the year,” Bloomberg reported.
Unusually tough year-on-year comparisons impacted the most recent quarter, as U.S. consumers had previously stockpiled essentials like toilet paper and detergent ahead of port strikes. The U.S. government shutdown and a temporary pause in food aid also weighed down results.
“People have not stopped washing their hair, they still buy diapers, they do their laundry, albeit at a little bit slower pace, so the market growth has certainly slowed over the last 18 to 24 months,” Schulten said, CNBC reported.
Outlook
Procter & Gamble reaffirmed its fiscal 2026 adjusted EPS guidance of $6.83 to $7.09, compared with the $6.97 consensus estimate, and maintained its fiscal 2026 sales outlook of $85.127 billion to $88.498 billion, versus the $86.823 billion estimate.
The company cut its fiscal 2026 GAAP earnings forecast, lowering its EPS outlook to $6.58 to $6.90 from a prior range of $6.71 to $7.09, below the $6.91 consensus estimate.
“We have confidence in our plans to deliver stronger results in the second-half of the fiscal year. We remain committed to our integrated growth strategy and are excited by the opportunity ahead to reinvent P&G and create the CPG company of the future, delivering long-term balanced top- and bottom-line growth and value creation,” said Shailesh Jejurikar, President and Chief Executive Officer.
PG Price Action: Procter & Gamble shares were down 0.62% at $145.15 during premarket trading on Thursday, according to Benzinga Pro data.
Photo by Jonathan Weiss via Shutterstock
