10-QPeriod: Q1 FY2026

PROCTER & GAMBLE Co Quarterly Report for Q1 Ended Sep 30, 2025

Filed October 24, 2025For Securities:PG

Summary

Procter & Gamble (PG) reported solid financial results for the three months ended September 29, 2025. Net sales increased by 3% year-over-year to $22.4 billion, driven by a combination of pricing, mix, and foreign exchange benefits, with a neutral impact from volume. Net earnings saw a significant increase of 20% to $4.8 billion, primarily due to lower restructuring charges compared to the prior year's significant charges related to market portfolio restructuring. Diluted Earnings Per Share (EPS) also rose by 21% to $1.95. The company demonstrated strong operational cash flow of $5.4 billion and achieved a robust adjusted free cash flow productivity of 102%. Despite a slight decrease in gross margin due to unfavorable mix and investment in product/packaging, effective management of Selling, General & Administrative (SG&A) expenses, including productivity savings, supported operating income growth. The company continues its portfolio and productivity plan, aiming for cost structure improvements.

Financial Highlights

52 data points
Beta

Revenue

$22.39B

51.4% Gross Margin

Net Income

$4.75B

21.2% Net Margin

EPS (Diluted)

$1.95

Total Assets

$127.60B

Cash & Equivalents

$11.17B

Free Cash Flow

$4.21B

Financial Statements
Beta
Revenue$22.39B
Cost of Revenue$10.89B
Gross Profit$11.50B
SG&A Expenses$5.64B
Operating Income$5.86B
Net Income$4.75B
EPS (Basic)$2.00
EPS (Diluted)$1.95
Shares Outstanding (Basic)2.34B
Shares Outstanding (Diluted)2.44B

Key Highlights

  • 1Net sales increased by 3% to $22.4 billion, with organic sales up 2%.
  • 2Net earnings surged by 20% to $4.8 billion, benefiting from lower prior-year restructuring charges.
  • 3Diluted EPS grew 21% to $1.95, while Core EPS increased 3% to $1.99.
  • 4Operating cash flow was strong at $5.4 billion, and adjusted free cash flow productivity reached 102%.
  • 5Gross margin declined by 70 basis points due to unfavorable mix and investments, but was offset by manufacturing productivity savings and pricing.
  • 6The Beauty segment showed the strongest net sales growth at 6%, followed by Grooming at 5%.
  • 7The company incurred $215 million in restructuring costs related to its portfolio and productivity plan, with a total estimated cost of $1.5 to $2.0 billion over two years.

Frequently Asked Questions

The substantial 20% increase in Net Earnings to $4.8 billion was primarily driven by a comparison to the prior year's quarter, which included significant restructuring charges related to the liquidation of operations in certain markets, notably Argentina. Excluding these specific charges, the underlying business performance also contributed to the earnings growth.

Procter & Gamble's segments showed varied performance. The Beauty segment led with a 6% increase in net sales, followed by Grooming with a 5% increase. Health Care, Fabric & Home Care, and Baby, Feminine & Family Care segments experienced more modest sales growth, ranging from 1% to 2%. Organic sales, which exclude currency impacts and acquisitions/divestitures, also showed positive growth in Beauty (6%) and Grooming (3%) and Health Care (1%), while Fabric & Home Care and Baby, Feminine & Family Care were flat.

Procter & Gamble is executing a portfolio and productivity plan to enhance its cost structure. For the three months ended September 30, 2025, the company incurred $215 million in restructuring costs. The total estimated before-tax restructuring costs for this plan are between $1.5 to $2.0 billion over two years, with half expected by the end of fiscal year 2026 and the remainder in fiscal year 2027. This plan includes a reduction of up to 7,000 non-manufacturing overhead personnel and brand/market exits.

The company reported strong operating cash flow of $5.4 billion for the quarter. Adjusted free cash flow was $4.9 billion, resulting in an impressive adjusted free cash flow productivity of 102%. This indicates the company's ability to generate significant cash relative to its net earnings, supporting its ability to fund dividends, share repurchases, and other investments.