01—Abstract
Summary
Summary of the 10-Q filed April 24, 2025. Cited figures are marked; the original filing is the authoritative source.
Procter & Gamble (PG) reported its fiscal third-quarter and nine-month results ending March 31, 2025.
For the quarter, net sales slightly decreased by 2% to $19.8 billiona, primarily due to unfavorable foreign exchange and a slight decline in unit volume, though this was partially offset by higher pricing. Net earnings remained flat year-over-year at $3.8 billion, with diluted Earnings Per Share (EPS) increasing 1% to $1.54. For the nine-month period, net sales saw a marginal decrease of $112 million to $63.4 billion, while net earnings increased by 5% to $12.4 billion, and diluted EPS rose by 6% to $5.03.
The year-over-year improvement in earnings was significantly influenced by the absence of a large intangible asset impairment charge in the prior year, partially offset by current year restructuring charges. The company's performance demonstrates resilience in a challenging global economic environment, with strategic pricing actions helping to offset volume and currency headwinds.
The Fabric & Home Care segment remained the largest contributor to net sales, while the Health Care segment showed positive organic sales growth. Investors will note the continued focus on productivity savings and disciplined cost management, alongside a stable operating cash flow generation, which supports ongoing capital allocation strategies like share repurchases and dividends.
02—Key points
Key Highlights
- For the third quarter, Net Sales decreased 2% to $19.8 billion, driven by unfavorable foreign exchange and a 1% unit volume decline, partially offset by 1% higher pricing.
- Net Earnings for the quarter were flat at $3.8 billion, while Diluted EPS increased 1% to $1.54.
- For the nine months ended March 31, 2025, Net Sales were $63.4 billion, a slight decrease of $112 million year-over-year.
- Net Earnings for the nine-month period increased 5% to $12.4 billion, with Diluted EPS rising 6% to $5.03, benefiting from the absence of a prior year intangible asset impairment charge.
- Organic sales increased 1% for the quarter and 2% for the nine-month period, indicating underlying demand resilience.
- Operating cash flow for the nine months was $12.8 billion, with adjusted free cash flow of $10.6 billion.
- The company repurchased approximately $7.96 billion in shares during the quarter and plans to continue share repurchases totaling $6 to $7 billion in fiscal year 2025.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2025, Procter & Gamble Co kept $0.19.
- Revenue$19.78B100.0%
- Cost of revenue−$9.69B49.0%
- Gross profit$10.08B51.0%
- Operating costs−$5.52B27.9%
- Operating income$4.56B23.0%
- Interest, other & tax−$789.0M4.0%
- Net income$3.77B19.1%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2025filed April 24, 2025Financial Statements
Q3 FY2025 against Q3 FY2024
| Line item | Q3 FY2025Q3 FY2024 | Change |
|---|---|---|
| Revenue | $19.78B$20.20B | −2.1% |
| Cost of Revenue | $9.69B$9.86B | −1.6% |
| Gross Profit | $10.08B$10.34B | −2.5% |
| SG&A Expenses | $5.52B$5.88B | −6.1% |
| Operating Income | $4.56B$4.46B | +2.2% |
| Net Income | $3.77B$3.75B | +0.4% |
| EPS (Basic) | $1.58$1.56 | +1.3% |
| EPS (Diluted) | $1.54$1.52 | +1.3% |
| Shares Outstanding (Basic) | 2.35B2.36B | −0.6% |
| Shares Outstanding (Diluted) | 2.45B2.47B | −0.9% |
05—Questions
Frequently Asked Questions
What was the primary driver for the slight decrease in Net Sales this quarter?
The primary drivers for the 2% decrease in Net Sales were unfavorable foreign exchange impacts (2%) and a 1% decline in unit volume. This was partially offset by a 1% increase in pricing.
How did the company's profitability change year-over-year for the nine-month period?
Net Earnings for the nine months increased by 5% to $12.4 billion. This improvement was significantly influenced by the absence of a $1.3 billion before-tax intangible asset impairment charge recorded in the prior year, partially offset by higher restructuring charges in the current year.
What is the company's outlook on capital allocation, specifically share repurchases?
Procter & Gamble reaffirmed its expectation to reduce outstanding shares through direct share repurchases, targeting $6 to $7 billion in fiscal year 2025. The company repurchased approximately $7.96 billion in shares during the current quarter.
Are there any significant ongoing restructuring activities impacting the results?
Yes, the company completed a limited market portfolio restructuring, primarily in certain Enterprise Markets like Argentina and Nigeria, which resulted in approximately $0.8 billion after-tax incremental charges in the prior period. The current period saw $0.987 billion in restructuring charges, mainly related to foreign currency translation losses from the liquidation of operations in Argentina.
06—Continue