Oct 22, 2026 earnings call — P&G reports organic growth; maintains guidance
Organic sales rose 4.0% and management kept fiscal 2027 sales guidance at 1% to 3% growth.
Revenue $23.3B (est $22.8B) · EPS $2.00 (est $1.88)
Key quotes
"By delivering superiority, we are winning with consumers and driving improved consumption, semester over semester into this first quarter."
"This outlook includes a cost headwind of approximately $1.4 billion after tax, driven by higher raw material, energy and transportation costs, and other premiums resulting primarily from the conflict in The Middle East This estimate assumes an effective Brent crude oil price of $100 a barrel"
"Strong productivity improvement of 250 basis points was offset by commodity and freight costs in addition to demand creation investments."
Analyst Q&A 17
Why margins rose with volume growth
Q (Lauren Lieberman · Barclays): Analyst asked why margins improved more now with similar volume growth as past periods, and whether the drivers are quarter-specific or structural.
A: Management said it is both structural and quarter-specific. Structurally, higher productivity, automation (Supply Chain 3.0), restructuring including a 15% headcount reduction, and smarter brand spending drive leverage. Quarter specifics include partial commodity flow-through and a $90 million IEEPA tariff refund.
"I think it is a combination of quarter specifics and structural." — Andre Schulten (CFO)
Sustainability of early-year momentum
Q (Steve Powers · Deutsche Bank): Analyst asked whether Q1 strength could be timing or competitive effects that hurt Q2, and which categories show sustainable momentum versus those needing more work.
A: Management said Q1 was a strong start with every region and category growing and share trending up, supporting confidence. They expect about 3% organic sales growth in H1 and acceleration in H2. Some categories (fabric, baby, beauty) show strong momentum, but about 40% of top category-country combinations still need fixing.
"3% for H1, and slight acceleration in half 2, which means consistent value and volume share growth." — Andre Schulten (CFO)
Pricing vs. commodity cost pressure
Q (Dara Mohsenian · Morgan Stanley): Analyst asked how P&G will use pricing to offset $1.4 billion commodity headwind amid weak consumer and retailer pushback, and how this balances with internal top-line progress.
A: Management said they will use three levers: record productivity, pricing with innovation (pricing tied to product and execution improvements), and time to phase recovery. They emphasized pricing will be done carefully so as not to jeopardize top-line momentum and noted the industry generally is pricing up at this level of commodity pressure.
"We will price we will price with innovation. Not jeopardizing the top line momentum." — Andre Schulten (CFO)
Competitor reactions and affordability
Q (Evercore): Analyst asked what competitor reactions P&G sees and how P&G handles affordability while maintaining share momentum.
A: Management said competition is intense and they adjusted where needed, fixing hygiene factors and adding superiority through product, communication, and execution. Growth focus is on growing categories, not just taking share, and they use a portfolio across value tiers plus targeted executions like Charmin and Bounty Essentials to address affordability and drive users.
"Growth going forward is not about taking share. Growth going forward is about growing our categories." — Andre Schulten (CFO)
Baby care growth and sustainability
Q (Bonnie Herzog · Goldman Sachs): Analyst asked about baby care strategy given U.S. promo intensity and competitor disruption in China, and how sustainable recent improvements are.
A: Management said global baby care sales are up 5% with share up 80 bps; U.S. baby care is up 3% sales and 7% volume with share gains. They have fixed hygiene factors, will launch mid-tier upgrades and premium innovations, and believe trading consumers up with superior propositions supports sustainable growth, noting China has been growing strongly.
"When we launch truly superior propositions that feed into what the premium consumer is looking for, Superior dryness, softness, premium materials, safety, on the highest level, ingredient safety, we win." — Andre Schulten (CFO)
U.S. share improvement and inventories
Q (Filippo Falorni · Citi): Analyst asked why 70% of top U.S. customers are holding/growing share, what more is assumed for the year, and how shipment-consumption gaps affect inventories.
A: Management said they are on track to be north of 80% by end of calendar year and use rapid diagnosis and funded action plans tailored to each retailer to restore user growth. They noted prior inventory shifts cause volatility and that quarter-to-quarter timing of promotions and innovation can move results, but they remain confident in 3% H1 guidance.
"Our objective that we stated before is 80% by the end of the calendar year." — Andre Schulten (CFO)
Q2 deceleration and fabric care context
Q (Chris Carey · Wells Fargo): Analyst asked if European shifts and consumer weakness explain Q2 deceleration, and for global fabric care growth and share dynamics.
A: Management agreed deceleration reflects fuel prices, geopolitical volatility, base period and inventory shifts, and they prefer a realistic outlook of 3% with quarter volatility. Fabric Care is strong: U.S. Fabric Care growing 4%, Europe 5%, and P&G gaining value share in both regions with innovations (GAIN, Tide, EVO) expanding the category.
"Fabric Care specifically, you are right in The U.S. Fabric Care business is growing at 4%." — Andre Schulten (CFO)
China performance drivers
Q (Nik Modi · RBC): Analyst asked why China is doing well despite weak macro and whether gains are beauty-led or broader.
A: Management said China has been strong six quarters by reinventing distributor, social-first marketing, execution for social selling and online, and stronger brick-and-mortar and innovation execution. Growth is broad: baby care up ~50% in Q1 (partly from a competitor issue), SK-II up 13%, fabric up 5%, fem care up 9%, but some brands like Olay need reinvention.
"The China business has been strong for 6 consecutive quarters now." — Andre Schulten (CFO)
Confidence in EPS midpoint with higher costs
Q (Peter Galbo · BofA): Analyst asked about confidence in achieving EPS midpoint given the raised input cost outlook and strong top-line.
A: Management said they are confident they will be in the range and are reiterating the range, but need time—about a quarter—to solidify top-line momentum and finalize commodity, pricing, and productivity impacts to know where in the range they will land.
"I am confident in the range. But we will need time to figure out where that range will end up." — Andre Schulten (CFO)
Timing of commodity cost phasing
Q (Peter Grom · UBS): Analyst asked how the 5% Q1 headwind becomes 8% for the year and whether some quarters will see worse profit pressure before offsets.
A: Management explained Q1 showed lower input cost effects due to inventory, Q2 assumes flows reflecting $100 a barrel consistent with the 8% annual headwind, and higher oil (e.g., 113) would push more impact into Q3 and Q4. They said Q2 has little time to react, while Q3/Q4 offer more time to respond.
"Q2 has been produced at $100 a barrel. So when I look at 8, reflecting $100 a barrel, my assumption if I were you would be that flows through in Q2." — Andre Schulten (CFO)
Future pricing and productivity timing
Q (Andrea Teixeira · JPMorgan): Analyst asked whether P&G will negotiate pricing with retailers given outlook, whether guidance excludes such pricing, and how productivity phasing looks after a 250 bps margin move.
A: Management would not disclose future pricing actions but said pricing is done with innovation and often timed with modular resets. On productivity, they delivered about $500 million-$550 million BT in Q1 and €2.8 billion last year, and expect productivity to be heavier in the back half of the year as in past patterns.
"On productivity, we have delivered about $500 million, $550 million BT productivity in Q1." — Andre Schulten (CFO)
Global industry growth trends
Q (Kevin Grundy · BNP Paribas): Analyst asked for a high-level view of industry growth across geographies and whether conditions changed since the last quarter.
A: Management said consumers are resilient and they see 2.5% to 3% value growth across categories globally, slightly better than last quarter. U.S. improved towards 3% value growth, enterprise markets 4% to 6% (up to 6% to 7% recently), and Europe muted at about 1%. They highlighted strong user growth opportunities in enterprise markets like Middle East and India.
"We see 2% to 3%, 2.5% to 3% value growth across all categories globally." — Andre Schulten (CFO)
Why guide slower in Q2 than Q1
Q (Jefferies): Analyst asked why management guides a deceleration into Q2 despite interventions working and easier comparables across divisions.
A: Management said consumer variables (fuel prices, uncertainty) create short-term pressure; there is both bull and bear case so they chose a middle path at 3%. They also cited pre-shipment to merge events in Europe and many moving pieces that prevent confidently saying Q2 will improve despite good interventions.
"The consumer is the key variable here." — Andre Schulten (CFO)
Category-level drivers for H2 acceleration
Q (Olivia Tong · Raymond James): Analyst asked how much H2 acceleration depends on category improvements versus P&G initiatives and what was learned from prior interventions (e.g., tissue/towel).
A: Management expects 2.5% to 3% value growth in categories and aims for share growth across all global categories. They expect Family Care, Beauty, and Healthcare (cold/cough season) to be most acceleration-prone in H2, with baby care and femcare progressing via retained trial and innovation; others should be steady but not a straight line due to external volatility.
"We clearly expect Family Care to return to share growth in the second half." — Andre Schulten (CFO)
Integration and support for Thorne
Q (Robert Moskow · TD): Analyst asked how P&G will enable Thorne's aggressive growth while keeping it separate and how P&G will retain Thorne's key people.
A: Management said priority is to retain what made Thorne successful and let Thorne lead while P&G complements. P&G can help with international expansion, scaling across categories later, and add capabilities in supply chain, ingredient qualification, and marketing support, but will avoid full integration now.
"We let the Thorn team lead us." — Andre Schulten (CFO)
Developing markets changes impact
Q (Edward Lewis · Rothschild): Analyst asked how recent organizational changes in developing markets helped performance and outlook internationally.
A: Management said it is early to credit the July 1 changes, but increased intentionality—separating India cluster, combining Turkey, and simplifying Europe go-to-market—has helped focus growth. They also cited strong leaders and sector CEO commitment; despite restructuring impacts, they are seeing mid single-digit growth that would be higher excluding restructuring.
"I would not attribute the majority of the progress in enterprise markets to the change that only went into effect July 1." — Andre Schulten (CFO)
Extra levers for commodity mitigation
Q (Michael Lavery · Piper Sandler): Analyst asked which levers P&G would push harder in H2 to mitigate higher oil and what mitigation is assumed in the outlook.
A: Management said all known elements (productivity, pricing with innovation, timing of innovation) are baked into the outlook and the range reflects flexibility to pull forward or push out those levers. More time in H2 allows shifting productivity, pricing, and innovation; Q1 flexibility is limited.
"Everything we know is baked into the Outlook." — Andre Schulten (CFO)