01—Abstract
Summary
Summary of the 10-Q filed October 18, 2024. Cited figures are marked; the original filing is the authoritative source.
Procter & Gamble's (PG) Q1 fiscal year 2025 report shows a slight decrease in net sales to $21.7 billiona, down 1% year-over-year.
This decline was primarily driven by unfavorable foreign exchange and a slight decrease in unit volume, though offset by a 1% increase in pricing. On an organic basis, sales increased by 2%, indicating underlying business strength. Net earnings attributable to P&G decreased by 12% to $4.0 billionb, largely due to significant restructuring charges of $0.8 billion after tax related to the liquidation of operations in Argentina.
Excluding these one-time charges, Core Diluted EPS saw a positive increase of 5% to $1.93c, highlighting the company's ability to manage profitability even amidst challenging market conditions. The company maintained strong operating cash flow of $4.3 billion and is committed to returning capital to shareholders through dividends and share repurchases.
02—Key points
Key Highlights
- Net sales for the quarter were $21.7 billion, a 1% decrease year-over-year, but organic sales grew by 2%, indicating underlying business resilience.
- Net earnings attributable to P&G declined by 12% to $4.0 billion, significantly impacted by $0.8 billion in after-tax restructuring charges from exiting operations in Argentina.
- Core Diluted EPS, excluding restructuring charges, increased by 5% to $1.93, demonstrating improved operational profitability.
- The Beauty segment experienced a 5% net sales decrease, primarily due to a decline in the super-premium SK-II brand and unfavorable product mix.
- Health Care and Fabric & Home Care segments showed modest net sales growth of 2% and 1% respectively, driven by pricing and volume increases.
- Operating cash flow remained strong at $4.3 billion, with adjusted free cash flow of $3.87 billion.
- The company plans to reduce outstanding shares through share repurchases valued at $6 to $7 billion in fiscal year 2025.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2025, Procter & Gamble Co kept $0.18.
- Revenue$21.74B100.0%
- Cost of revenue−$10.42B47.9%
- Gross profit$11.32B52.1%
- Operating costs−$5.52B25.4%
- Operating income$5.80B26.7%
- Interest, other & tax−$1.84B8.5%
- Net income$3.96B18.2%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2025filed October 18, 2024Financial Statements
Q1 FY2025 against Q1 FY2024
| Line item | Q1 FY2025Q1 FY2024 | Change |
|---|---|---|
| Revenue | $21.74B$21.87B | −0.6% |
| Cost of Revenue | $10.42B$10.50B | −0.8% |
| Gross Profit | $11.32B$11.37B | −0.5% |
| SG&A Expenses | $5.52B$5.60B | −1.5% |
| Operating Income | $5.80B$5.77B | +0.5% |
| Net Income | $3.96B$4.52B | −12.4% |
| EPS (Basic) | $1.65$1.89 | −12.7% |
| EPS (Diluted) | $1.61$1.83 | −12.0% |
| Shares Outstanding (Basic) | 2.36B2.36B | −0.2% |
| Shares Outstanding (Diluted) | 2.47B2.48B | −0.4% |
05—Questions
Frequently Asked Questions
What was the primary driver for the decrease in net earnings?
The primary driver for the decrease in net earnings was a significant charge of approximately $0.8 billion after tax related to the substantial liquidation of operations in Argentina and other Enterprise Markets.
How did the company's different business segments perform?
The Beauty segment saw a 5% net sales decrease due to factors like the decline of the SK-II brand. Health Care and Fabric & Home Care segments reported modest growth, while Grooming remained flat, and Baby, Feminine & Family Care saw a 2% decrease in net sales.
What is the outlook for shareholder returns?
Procter & Gamble continues its commitment to returning capital to shareholders. The company expects to reduce outstanding shares through share repurchases valued between $6 to $7 billion in fiscal year 2025.
What is the significance of the 'Core EPS' figure?
Core EPS (Earnings Per Share) is a non-GAAP measure that excludes incremental restructuring charges. The increase of 5% in Core EPS to $1.93 highlights the underlying operational profitability of the business, separate from the impact of the significant restructuring activities.
06—Continue