Procter & Gamble posted mixed results for its fiscal third quarter, impacted by declining demand and market uncertainties. While the company slightly exceeded analysts’ expectations for earnings per share, reporting $1.54 versus the anticipated $1.53, it fell short on revenue with $19.78 billion compared to the expected $20.11 billion. Net sales dropped 2%, while organic sales, which exclude the effects of acquisitions, divestitures, and currency changes, rose by 1%.
The company is now projecting flat sales growth for fiscal 2025, revising its earlier expectation of a 2% to 4% increase. Additionally, it adjusted its core earnings per share forecast to a range of $6.72 to $6.82, down from its prior projection of $6.91 to $7.05. P&G reported net income of $3.77 billion, or $1.54 per share, up slightly from $3.75 billion, or $1.52 per share, in the same quarter last year.
Executives attributed the subdued performance and revised guidance to increasing uncertainty in global trade, upcoming tariffs, and a more cautious consumer mindset. CFO Andre Schulten pointed out that shopper traffic declined, with consumers increasingly seeking value by turning to online platforms, club retailers, and larger format stores. The broader political climate and nationalistic rhetoric were also noted as influencing customer behavior, though Schulten clarified that overt nationalism in buying habits had not yet emerged in key markets such as Canada, Europe, or China.
Tariffs are expected to cost the company between $1 billion and $1.5 billion annually. While these costs may lead to price increases starting in the next fiscal year, P&G is exploring sourcing alternatives, productivity enhancements, and product reformulations to ease the pressure. CEO Jon Moeller emphasized that tariffs are inherently inflationary and may push the company to raise prices in the near term.
Among business segments, the baby, feminine, and family care division saw the steepest volume decline at 2%. Fabric and home care, as well as health care, also experienced 1% drops. The beauty segment remained flat overall, despite strong growth from SK-II in Greater China, a region where overall organic sales fell 2%. North America posted a modest 1% increase. The only unit to post volume growth was grooming, with a 1% rise, reflecting resilience in products like Gillette and Venus.
READ MORE: