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Procter & Gamble PG Q1 2025 Earnings Report: Procter & Gamble reported better-than-expected results for its fiscal first quarter on Friday, as strong demand for its beauty and grooming products boosted performance.
Chief Executive Officer Jon Moeller acknowledged that the company continues to deal with higher costs linked to tariffs and a difficult global and consumer environment.
Even so, P&G maintained its full-year forecast for both revenue and earnings for the fiscal year that began in July.
Procter & Gamble reported quarterly results that surpassed Wall Street estimates for the period ended September 30, according to data from LSEG.
The consumer goods giant posted adjusted earnings of $1.99 per share, higher than analysts’ expectations of $1.90 per share. Revenue reached $22.39 billion, also ahead of the projected $22.18 billion.
Net income attributable to P&G climbed to $4.75 billion, or $1.95 per share, compared with $3.96 billion, or $1.61 per share, during the same quarter last year.
Procter & Gamble posted adjusted earnings of $1.99 per share for the quarter, excluding costs related to restructuring and other one-time items.
The company’s net sales increased 3% to $22.39 billion, while organic sales—which remove the effects of acquisitions, divestitures, and currency changes—rose 2%.
However, P&G’s sales volume remained flat compared with the same quarter last year. Volume, which excludes price effects, provides a clearer picture of consumer demand.
Like many consumer goods companies, P&G has seen demand soften for certain products as shoppers, cautious about inflation, continue to hunt for deals.
‘K-Shaped’ Shopping Trends
Procter & Gamble’s Chief Financial Officer, Andre Schulten, described the consumer landscape as “stable, though challenging” in a media call. He noted that shopper behavior has remained largely consistent over recent quarters.
In the United States, the company’s biggest market, demand for P&G products has eased slightly. Schulten highlighted a growing divide in spending habits across income groups, a pattern commonly referred to as a “K-shaped” economy.
Procter & Gamble CFO Andre Schulten said that wealthier consumers are gravitating toward larger pack sizes at club stores and online outlets.
“That’s how they seek value,” he explained.
Meanwhile, U.S. shoppers on tighter budgets are stretching every product to its limit. They are making sure to finish every drop of detergent or shampoo and deplete pantry items before buying more, Schulten added.
During the company’s conference call, Procter & Gamble executives pointed out that private-label brands are losing ground, contrary to the usual trend seen during economic downturns.
In response to the 2008 recession, P&G shifted its focus to premium products, which are harder to substitute with cheaper private-label options.
On Friday, the company reported a 2% drop in volume for its health care and fabric and home care divisions, which include well-known brands like Tide and Swiffer.
Procter & Gamble executives highlighted increased competition in certain categories, spurred by rival promotions and discounting.
To attract customers, the company is prioritizing product innovation that can justify premium pricing and demonstrate superior quality. CFO Andre Schulten noted that Tide has begun shipping its “most significant liquid detergent upgrade in two decades.”
Meanwhile, P&G’s baby, feminine, and family care division, which features brands like Pampers and Tampax, posted flat sales volume for the quarter.
Procter & Gamble’s beauty division shined during the quarter, with brands like Olay and SK-II driving performance. The segment recorded a 4% increase in volume and a 6% rise in total sales.
Olay’s Super Serum line stood out as a top seller, showing that consumers are willing to spend more on premium skincare.
The company’s grooming business, which includes Gillette and Venus razors, also posted gains. Volume rose 1%, leading to a 5% increase in sales for the quarter.
Procter & Gamble has lowered its forecast for the impact of President Donald Trump’s tariffs, now expecting $400 million in after-tax costs for fiscal 2026, down from an earlier estimate of $800 million.
The initial projection had factored in retaliatory tariffs on Canada, which have since been removed. CEO Jon Moeller told CNBC’s “Squawk Box” on Friday that the company now plans to raise prices less than previously anticipated.
President Donald Trump announced Thursday evening that he is halting all trade negotiations with Canada over a television advertisement, a decision that could increase costs for Procter & Gamble.
The company, however, maintained its fiscal 2026 outlook, forecasting sales growth of 1% to 5% and earnings per share in the range of $6.83 to $7.09.
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