PROCTER & GAMBLE Co (PG): Results of Operations and Financial Condition
PROCTER & GAMBLE Co (PG) filed an SEC Form 8-K — Results of Operations and Financial Condition. News Release The Procter & Gamble Company One P&G Plaza Cincinnati, OH 45202 P&G ANNOUNCES FOURTH QUARTER AND FISCAL YEAR 2026 RESULTS Q4 ’26: Net Sales +2%; Organic Sales 0%; Diluted EPS -15%; Core EPS -3% FY ’26: Net Sales +3%; Organic Sales +1%; Diluted EPS +2%; Core EPS +1% C
How this was made
The 30-second read
Why it matters
The key tradable takeaway is the mismatch between sales growth and earnings pressure in Q4 (diluted EPS -15%, core EPS -3%) alongside a 60 bps gross margin decline, while FY EPS remains slightly positive (+2% GAAP, +1% core). Management also reiterates a 2027 execution focus and productivity-funded investments.
Market read
A fresh earnings datapoint that can reset near-term expectations for margins and cost control, even as full-year EPS growth and cash returns remain supportive.
What to watch
Core gross margin was flat and productivity savings are cited; traders may over-weight the GAAP gross margin decline versus underlying core profitability stability.
P&G ANNOUNCES FOURTH QUARTER AND FISCAL YEAR 2026 RESULTS
Fiscal 2026 sales and EPS increased, supported by favorable foreign exchange, pricing and lower shares outstanding, but fourth-quarter organic sales were unchanged and diluted EPS declined 15% as gross margin fell and SG&A increased.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Fiscal Year Net SalesGAAP | $87.0 billion | – | +3% |
| Fiscal Year Organic Salesnon-GAAP | +1% | – | +1% |
| Fiscal Year Diluted EPSGAAP | $6.62 | – | +2% |
| Fiscal Year Core EPSnon-GAAP | $6.89 | – | +1% |
| Fiscal Year Currency-Neutral Core EPSnon-GAAP | unchanged | – | unchanged versus the prior year core EPS |
| Fiscal Year Operating Cash FlowGAAP | $19.6 billion | – | – |
| Fiscal Year Net EarningsGAAP | $16.1 billion | – | – |
| Fiscal Year Adjusted Free Cash Flow Productivitynon-GAAP | 100% | – | – |
| Fourth Quarter Net SalesGAAP | $21.2 billion | – | +2% |
| Fourth Quarter Organic Salesnon-GAAP | unchanged | – | unchanged versus the prior year |
| Fourth Quarter Diluted EPSGAAP | $1.26 | – | (15)% |
| Fourth Quarter Core EPSnon-GAAP | $1.43 | – | (3)% |
| Fourth Quarter Currency-Neutral Core EPSnon-GAAP | (5)% | – | (5)% versus the prior year core EPS |
| Fourth Quarter Operating Cash FlowGAAP | $5.1 billion | – | – |
| Fourth Quarter Net EarningsGAAP | $3.1 billion | – | – |
| Fourth Quarter Adjusted Free Cash Flow Productivitynon-GAAP | 133% | – | – |
| Fourth Quarter Reported Gross Margin ChangeGAAP | decreased 60 basis points | – | decreased 60 basis points versus year ago |
| Fourth Quarter Core Gross Margin Changenon-GAAP | unchanged | – | unchanged versus year ago |
| Fourth Quarter Reported SG&A as a Percentage of Sales ChangeGAAP | increased 160 basis points | – | increased 160 basis points versus the prior year |
| Fourth Quarter Core SG&A as a Percentage of Sales Changenon-GAAP | increased 130 basis points | – | increased 130 basis points versus year ago |
| Fourth Quarter Reported Operating Margin ChangeGAAP | decreased 220 basis points | – | decreased 220 basis points versus the prior year |
| Fourth Quarter Core Operating Margin Changenon-GAAP | decreased 130 basis points | – | decreased 130 basis points versus the prior year |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| BeautyOrganic sales increased four percent. Hair Care organic sales increased mid-single digits, driven by volume growth in Asia Pacific and Europe, innovation-driven pricing in Latin America and Asia Pacific and favorable geographic mix. Personal Care organic sales increased mid-single digits, while Skin Care organic sales were unchanged as super-premium SK-II growth was offset by a volume decline in Greater China. | Net Sales +6% | – | +6% |
| GroomingOrganic sales were unchanged as the impacts of innovation-based pricing were offset by a volume decline, primarily in IMEA, and unfavorable product mix. | Net Sales +1% | – | +1% |
| Health CareOrganic sales decreased one percent. Oral Care organic sales decreased mid-single digits due to a volume decline led by North America and Greater China, while Personal Health Care organic sales increased mid-single digits on higher pricing and volume growth primarily in North America. | Net Sales +1% | – | +1% |
| Fabric & Home CareOrganic sales were unchanged. Fabric Care organic sales increased low single digits, driven primarily by volume growth led by Europe and favorable product mix, partly offset by merchandising investments. Home Care organic sales decreased low single digits due to volume decline, partly offset by higher pricing, both primarily in North America. | Net Sales +1% | – | +1% |
| Baby, Feminine & Family CareOrganic sales decreased two percent. Baby Care organic sales increased low single digits, while Feminine Care organic sales decreased low single digits and Family Care organic sales decreased mid-single digits. | Net Sales (1)% | – | (1)% |
Fiscal Year 2027 outlook
- Revenueall-in sales growth in the range of one to three percent versus the prior year
- Tax ratecore effective tax rate to be approximately 20%
- Noteorganic sales growth in the range of one to three percent versus prior year
- Noteheadwind of 30 to 50 basis points from brand, product form and go-to-market discontinuations
- Notediluted net earnings per share growth in the range of one to five percent versus fiscal 2026 GAAP EPS of $6.62
- NoteGAAP EPS includes expected non-core restructuring charges of $0.13 to $0.17 per share
- Notecore earnings per share growth in the range of in-line to three percent versus fiscal 2026 core EPS of $6.89
- Noterange of $6.89 to $7.11 per share, with a mid-point estimate of $7.00, or an increase of one and a half percent
- Noteheadwind of approximately $1 billion after-tax driven by higher raw materials, energy and transportation costs
- Note$150 million after-tax from higher net interest expense
- Note$150 million after-tax from lower non-operating income
- Note$50 million after-tax from unfavorable foreign exchange rates
- Noteheadwind of $0.56 per share for fiscal 2027, or an eight percent drag on core EPS growth
- NoteCapital spending is estimated to be in the range of four and a half to five and a half percent of fiscal 2027 net sales
- Noteadjusted free cash flow productivity of 85% to 90%
- Notepay around $10 billion in dividends
- Noterepurchase approximately $5 billion of common shares
Capital returns
- returned over $15 billion of value to shareholders in fiscal 2026
- $10.2 billion in dividend payments
- $5.0 billion of share repurchases
- With the dividend increase in April 2026, this marks the 70th consecutive year that P&G has increased its dividend and the 136th consecutive year that P&G has paid a dividend since its incorporation in 1890.
What drove it
- Fiscal year net sales growth comprised a two percent increase due to favorable foreign exchange impacts and a one percent increase from higher pricing. Volume and mix were unchanged versus prior year.
- Fourth-quarter foreign exchange and rounding each contributed one percent to net sales growth. Volume, pricing and mix had a neutral impact on sales growth.
- Core gross margin was supported by 160 basis points of productivity savings, 40 basis points of net tariff benefit from recognized recoveries and higher costs, 20 basis points of other miscellaneous items and rounding, and 10 basis points of pricing benefit.
- Core operating margin included gross productivity savings of 460 basis points.
- The company expects to incur non-core restructuring costs of approximately $1 to $1.6 billion before-tax over a two-year period, with over half of the costs incurred in fiscal 2026.
Concerns
- Fourth-quarter organic sales were unchanged versus the prior year.
- Fourth-quarter diluted EPS decreased fifteen percent and core EPS decreased three percent.
- Reported gross margin decreased 60 basis points, while reported SG&A as a percentage of sales increased 160 basis points.
- Core SG&A increased by 410 basis points of reinvestments, primarily in marketing, partially offset by 300 basis points of productivity savings.
- Fiscal 2027 core EPS faces a combined headwind of $0.56 per share, or an eight percent drag on core EPS growth.
- Fiscal 2027 organic sales guidance includes a headwind of 30 to 50 basis points from brand, product form and go-to-market discontinuations.
What to watch
- Progress toward fiscal 2027 all-in sales growth and organic sales growth in the range of one to three percent.
- Whether pricing, volume and mix improve from their neutral fourth-quarter contribution to sales growth.
- Delivery of productivity savings and the level of marketing and product/package reinvestments.
- The impact of higher raw materials, energy, transportation, interest expense, lower non-operating income and unfavorable foreign exchange rates.
- Remaining restructuring costs expected in fiscal 2027 under the Focused Portfolio, Supply Chain and Productivity Plan.
- Fiscal 2027 adjusted free cash flow productivity of 85% to 90%, dividends around $10 billion and approximately $5 billion of common-share repurchases.
Balance sheet and cash flow
- Fiscal year operating cash flow of $19.6 billion
- Fiscal year net earnings of $16.1 billion
- Fiscal year adjusted free cash flow productivity of 100%
- Fourth quarter operating cash flow of $5.1 billion
- Fourth quarter net earnings of $3.1 billion
- Fourth quarter adjusted free cash flow productivity of 133%
Analysis
P&G closed fiscal 2026 with net sales of $87.0 billion, up 3%, while organic sales increased 1%. Favorable foreign exchange contributed two percent to fiscal-year sales growth and higher pricing added one percent, while volume and mix were unchanged. Diluted EPS increased 2% to $6.62 and core EPS increased 1% to $6.89. The company generated operating cash flow of $19.6 billion and reported adjusted free cash flow productivity of 100%.
The April-June quarter was materially softer at the underlying sales level. Net sales increased 2% to $21.2 billion, entirely reflecting one percent foreign exchange and one percent rounding contributions, while organic sales were unchanged. Beauty was the principal growth contributor, with 6% net sales growth and 4% organic sales growth. Health Care organic sales declined 1%, Fabric and Home Care was unchanged, Grooming was unchanged, and Baby, Feminine and Family Care organic sales declined 2%.
Quarterly profitability declined as reinvestment and margin pressure outweighed sales growth. Diluted EPS fell 15% to $1.26 and core EPS fell 3% to $1.43. Reported gross margin decreased 60 basis points, reported SG&A as a percentage of sales increased 160 basis points, and reported operating margin decreased 220 basis points. Core gross margin was unchanged, supported by productivity savings and tariff benefit, but core SG&A rose 130 basis points as marketing-led reinvestments exceeded productivity savings. Core operating margin declined 130 basis points, including 90 basis points of non-core restructuring charges excluded from the reported comparison.
Capital return remained substantial in fiscal 2026, with over $15 billion returned to shareholders, including $10.2 billion of dividends and $5.0 billion of repurchases. The company expects approximately $1 to $1.6 billion before-tax of non-core restructuring costs over two years, with the remainder expected in fiscal 2027 after over half was incurred in fiscal 2026. This plan is intended to streamline the portfolio and organization, improve the cost structure and support investment in growth.
Fiscal 2027 guidance calls for one to three percent all-in and organic sales growth, alongside GAAP EPS growth of one to five percent and core EPS growth from in-line to 3%, or $6.89 to $7.11 per share. The outlook embeds a 30 to 50 basis point organic-sales headwind from discontinuations and a combined $0.56 per-share, eight percent drag on core EPS growth from costs, interest expense, non-operating income and foreign exchange. Management expects productivity to fund investment, with adjusted free cash flow productivity of 85% to 90%, dividends around $10 billion and approximately $5 billion of repurchases.
Management, verbatim
Fiscal 2026 was a year of foundation building while continuing to grow sales and profit and return high levels of cash to shareowners despite a very challenging geopolitical and economic environment.
Shailesh Jejurikar, President and Chief Executive Officer
We are confident in our plans to accelerate growth from semester-to-semester, and our investments will be funded with a strong productivity program.
Shailesh Jejurikar, President and Chief Executive Officer
Not in the filing
stated, not guessed- Exact fiscal period-end date
- Absolute revenue for each business segment
- Fiscal-year gross margin
- Fourth-quarter gross margin percentage
- Fiscal-year operating income
- Fourth-quarter operating income
- Fiscal-year operating margin
- Fourth-quarter operating margin percentage
- Fiscal-year SG&A expense
- Fourth-quarter SG&A expense
- Capital spending amount for fiscal 2026
- Cash balance
- Debt balance
- Actual effective tax rate for fiscal 2026
- Quarterly revenue, EPS, margin and cash-flow guidance
- Prior outlook for comparison
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This SEC 8-K includes P&G’s FY2026 and Q4 results (Item 2.02) with GAAP and non-GAAP EPS, cash flow, shareholder returns, and segment organic sales drivers.
Ticker impact
P&G reported FY2026 net sales of $87.0B (+3%) but Q4 diluted EPS fell 15% to $1.26, with core EPS down 3%.
Near-term bias likely negative versus expectations due to the Q4 EPS decline and gross margin down 60 bps, despite FY sales growth.
The filing provides GAAP and core EPS changes for both Q4 and full year, plus gross margin movement and cash return, which are direct drivers of valuation and near-term sentiment.
Market effects
Signals continued margin pressure for consumer staples, with pricing offsetting volume softness and higher SG&A.
Segment commentary highlights geographic mix effects (e.g., Greater China weakness in Skin Care, Asia Pacific strength in Hair Care).
FX and geopolitical/economic volatility are explicitly cited as ongoing headwinds, relevant for multinational consumer demand and cost assumptions.
Counterpoint
FY2026 diluted EPS is up 2% and adjusted free cash flow productivity is strong, suggesting the Q4 EPS drop may be more cost-timing than demand collapse.
Key entities
- issuerProcter & Gamble Company
Reported FY2026 and Q4 results, including EPS declines in Q4, gross margin down 60 bps, and shareholder returns exceeding $15B.
