ii view: P&G details best sales growth in three years

First-quarter results to 30 September

• Net sales up 4% to $23.28 billion
• Adjusted earnings up 1% to $1.97 per share
• Core earnings up 1% to $2 per share
• Share buybacks of $2.6 billion
• Quarterly dividend unchanged from Q4 at $1.0885 per share

Guidance:

• Now expects full-year sales growth of between 2% and 4%, up from a previous 1-3% estimate
• Continues to expect growth in adjusted core earnings per share (EPS) of between 1% and 5%

Chief executive Shailesh Jejurikar 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.

“We remain committed to our strategy to delight consumers with superior products at a superior value by putting the consumer first in everything we do. We are confident in the near term and excited about the future."

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ii round-up:

Procter & Gamble Co (NYSE:PG) has reported its highest sales growth in three years, aided by a sharpened strategy under relatively new head Shailesh Jejurikar.

A 4% increase in first-quarter revenue to $23.28 billion pushed adjusted, or core earnings up 1% to $2 per share. Analysts had expected outcomes of $22.8 billion and $1.88 per share respectively. The $3.8 billion acquisition of vitamin maker Thorne in August means annual sales growth of up to 4% is expected versus a top end of 3% previously.

Shares in the Dow Jones company rose 5% in post results US trading having come into these latest numbers up by around a tenth so far in 2026. That’s similar to the Dow Jones itself year-to-date as well as for European rival Unilever (LSE:ULVR).  

P&G sells across five product categories including Beauty, Grooming and Healthcare. Group brand names include Pantene, Gillette, and Seven Seas vitamins.

Organic sales, or those stripped of acquisitions and currency moves, rose across all product categories, with 29 of its top 50 products holding or growing market share. 

Core selling costs as a percentage of sales eased 0.9%, with the core operating profit margin including 2.5% of productivity savings.

A previously announced quarterly dividend of $1.0885 per share is unchanged from the prior quarter and sits alongside share buybacks of $2.6 billion during the period.

Broker Morgan Stanley reiterated its ‘overweight’ stance on P&G shares post the results, increasing its price target to $185 from $166.

ii view:

Started in 1837, P&G today employs more than 105,000 people across 70 countries. Other group brands include Ariel, Head & Shoulders, Fairy, Crest toothpaste and Always. Fabric and Home Care products made most revenues over the last financial year at 35%. That was followed by Baby, Feminine & Family Care at 23%, Beauty 18%, Healthcare 14%, and Grooming most of the 10% balance.

Geographically, North America makes most sales at 52%. Then comes Europe at 22%, Asia Pacific, China and Latin America all at 7% each, and India, the Middle East and Africa the balance of 5%. Global competitors include Colgate-Palmolive Co (NYSE:CL) and L'Oreal SA (EURONEXT:OR).

For investors, war-inflated energy prices pressuring disposable incomes could yet push customers towards cheaper supermarket own brands or online alternatives such those available from Amazon. Volatility in raw material costs given ongoing global trade and geopolitical tensions cannot be forgotten. The impact of product chemicals and packaging on the environment continues to warrant consideration, while sizeable sales overseas leave currency headwinds a potential feature.

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To the upside, P&G’s extensive list of household goods feature regularly for shoppers across the globe. Management initiatives to sharpen productivity and reduce costs are ongoing. Wide geographical diversity should help positives for one region counter challenges for another, while 70 years of consecutive dividend hikes leave the shares on a dividend yield of 2.7%.

In all, and while risks remain, this giant of the consumer goods world looks to continue justifying its place in many already diversified investor portfolios.  

Positives:

• Product and geographical diversity
• Progressive dividend policy

Negatives:

• Uncertain economic outlook
• Currency movements can hinder performance

The average rating of stock market analysts:

Cautious buy