P&G(PG) - 2025 Q4 - Annual Results

Executive Summary This section provides an overview of P&G's fiscal year 2025 performance, including key financial highlights and the CEO's outlook for fiscal year 2026 Fiscal Year 2025 Highlights P&G reported flat net sales but 2% organic sales growth for fiscal year 2025. Diluted EPS increased by 8% to $6.51, and Core EPS grew by 4% to $6.83, reflecting a solid performance in a dynamic environment | Metric | 2025 | 2024 | % Change | | :----- | :----- | :----- | :------- | | Net Sales (GAAP) | $84.3B | $84.0B | 0% | | Organic Sales (Non-GAAP) | n/a | n/a | +2% | | Diluted EPS (GAAP) | $6.51 | $6.02 | +8% | | Core EPS (Non-GAAP) | $6.83 | $6.59 | +4% | - Organic sales growth was driven by a one percent increase from higher pricing and a one percent increase from organic volume[3] Fourth Quarter 2025 Highlights For the fourth quarter of fiscal year 2025, P&G achieved 2% growth in both net sales and organic sales. Diluted EPS surged by 17% to $1.48, while Core EPS increased by 6% to $1.48, demonstrating strong quarterly performance | Metric | 2025 | 2024 | % Change | | :----- | :----- | :----- | :------- | | Net Sales (GAAP) | $20.9B | $20.5B | 2% | | Organic Sales (Non-GAAP) | n/a | n/a | +2% | | Diluted EPS (GAAP) | $1.48 | $1.27 | +17% | | Core EPS (Non-GAAP) | $1.48 | $1.40 | +6% | - Q4 organic sales growth was driven by a one percent increase from higher pricing and a one percent increase from favorable mix impacts[7] CEO Commentary and Fiscal Year 2026 Outlook CEO Jon Moeller highlighted sales and profit growth in fiscal 2025 despite a challenging environment and expressed confidence in delivering another year of organic sales growth, Core EPS growth, and strong adjusted free cash flow productivity in fiscal 2026, driven by an integrated strategy focused on performance, superiority, productivity, and agility - CEO Jon Moeller stated, "We grew sales and profit in fiscal 2025 and returned high levels of cash to shareowners in a dynamic, difficult and volatile environment"[2] - For fiscal 2026, the Company expects to deliver another year of organic sales growth, Core EPS growth, and strong adjusted free cash flow productivity[2] - The Company remains committed to its integrated strategy: a focused product portfolio, superiority across product performance, packaging, brand communication, retail execution, and consumer/customer value, productivity, constructive disruption, and an agile and accountable organization[2] Fiscal Year 2025 Financial Performance This section details P&G's fiscal year 2025 financial results, covering net sales, earnings per share, cash flow, and shareholder returns Net Sales P&G's net sales for fiscal year 2025 remained flat at $84.3 billion compared to the prior year. Organic sales, which exclude the impacts of foreign exchange and acquisitions/divestitures, increased by 2%, driven equally by higher pricing and organic volume | Driver | Impact on Net Sales | Impact on Organic Sales | | :----- | :------------------ | :---------------------- | | Pricing | +1% | +1% | | Foreign Exchange | -1% | N/A | | Volume | 0% | +1% | | Mix | 0% | 0% | | Total Net Sales | 0% | +2% | - Fiscal year 2025 net sales were $84.3 billion, unchanged versus the prior year[3] Earnings Per Share (EPS) Diluted net earnings per share for fiscal year 2025 increased by 8% to $6.51, primarily due to reduced selling, general and administrative costs and the absence of a prior-year impairment charge on Gillette intangible assets. Core EPS rose 4% to $6.83 | Metric | 2025 | 2024 | % Change | | :----- | :----- | :----- | :------- | | Diluted EPS (GAAP) | $6.51 | $6.02 | +8% | | Core EPS (Non-GAAP) | $6.83 | $6.59 | +4% | | Currency-neutral Core EPS | N/A | N/A | +4% | - The increase in diluted EPS was driven by a reduction in selling, general and administrative costs and the non-cash impairment charge of $1.3 billion on the Gillette intangible asset in the prior year[4] Operating Cash Flow and Free Cash Flow Productivity The Company generated $17.8 billion in operating cash flow and $16.1 billion in net earnings for fiscal year 2025. Adjusted free cash flow productivity was 87%, indicating strong cash generation relative to earnings - Operating cash flow for the fiscal year was $17.8 billion[5] - Net earnings for the fiscal year were $16.1 billion[5] - Adjusted free cash flow productivity was 87%[5] Shareholder Returns P&G returned over $16 billion of value to shareholders in fiscal 2025, comprising $9.9 billion in dividend payments and $6.5 billion of share repurchases. This marks the 69th consecutive year of dividend increases and the 135th consecutive year of dividend payments - Over $16 billion of value was returned to shareholders in fiscal 2025[6] - Shareholder returns included $9.9 billion in dividend payments and $6.5 billion of share repurchases[6] - The Company increased its dividend for the 69th consecutive year and paid a dividend for the 135th consecutive year[6] Fourth Quarter 2025 Financial Performance This section presents P&G's financial performance for the fourth quarter of fiscal year 2025, including sales, earnings, cash flow, and segment-specific results Net Sales P&G's net sales for the fourth quarter of fiscal year 2025 increased by 2% to $20.9 billion. Organic sales also grew by 2%, driven by higher pricing and favorable mix, while volume and foreign exchange had a neutral impact | Driver | Impact on Net Sales | Impact on Organic Sales | | :----- | :------------------ | :---------------------- | | Pricing | +1% | +1% | | Mix | +1% | +1% | | Volume | 0% | 0% | | Foreign Exchange | 0% | N/A | | Total Net Sales | +2% | +2% | - Fourth quarter net sales were $20.9 billion, an increase of two percent versus the prior year[7] Earnings Per Share (EPS) Diluted net earnings per share for Q4 FY2025 increased by 17% to $1.48, primarily due to lower restructuring charges in the prior year. Core EPS grew by 6% to $1.48, with currency-neutral core EPS increasing by 5% | Metric | 2025 | 2024 | % Change | | :----- | :----- | :----- | :------- | | Diluted EPS (GAAP) | $1.48 | $1.27 | +17% | | Core EPS (Non-GAAP) | $1.48 | $1.40 | +6% | | Currency-neutral Core EPS | N/A | N/A | +5% | - The 17% increase in diluted net earnings per share was driven primarily by higher restructuring charges in the prior year related to the substantial liquidation of operations in certain Enterprise Markets[8] Operating Cash Flow and Free Cash Flow Productivity In Q4 FY2025, P&G generated $5.0 billion in operating cash flow and $3.6 billion in net earnings, achieving an adjusted free cash flow productivity of 110%, indicating strong cash conversion - Operating cash flow was $5.0 billion[9] - Net earnings were $3.6 billion[9] - Adjusted free cash flow productivity was 110%[9] Segment Performance All segments reported positive organic sales growth in Q4 2025, ranging from 1% to 2%, reflecting broad-based strength across P&G's diverse portfolio | Segment | Organic Sales Growth | | :---------------------- | :------------------- | | Beauty | 1% | | Grooming | 1% | | Health Care | 2% | | Fabric & Home Care | 1% | | Baby, Feminine & Family Care | 1% | | Total P&G | 2% | Beauty Segment This section details the performance and key aspects of the Beauty segment - Beauty segment organic sales increased one percent versus year ago[12] - Hair Care organic sales were unchanged, with innovation-driven growth in Latin America and Europe offset by volume declines in North America and Greater China[12] - Personal Care organic sales increased low single digits driven by volume growth in North America, partially offset by unfavorable geographic mix[13] Grooming Segment This section details the performance and key aspects of the Grooming segment - Grooming segment organic sales increased one percent versus year ago, driven by innovation-based pricing, partially offset by an appliances volume decline[17] Health Care Segment This section details the performance and key aspects of the Health Care segment - Health Care segment organic sales increased two percent versus year ago[17] - Oral Care organic sales increased low single digits driven by product mix from premium innovation[17] - Personal Health Care organic sales also increased low single digits driven by growth due to pricing, partially offset by a volume decline due to lower average incidence of cough and cold in North America[17] Fabric & Home Care Segment This section details the performance and key aspects of the Fabric & Home Care segment - Fabric and Home Care segment organic sales increased one percent versus year ago[17] - Fabric Care organic sales increased low single digits driven primarily by innovation-driven growth in North America[17] - Home Care organic sales also increased low single digits due to volume growth in North America and Europe[17] Baby, Feminine & Family Care Segment This section details the performance and key aspects of the Baby, Feminine & Family Care segment - Baby, Feminine and Family Care segment organic sales increased one percent versus year ago[17] - Baby Care organic sales declined low single digits driven by volume declines in North America[17] - Feminine Care organic sales increased low single digits driven by increased pricing and favorable product mix[17] Profitability and Efficiency Metrics P&G's Q4 2025 profitability metrics showed improvements in operating margin driven by productivity savings, despite a decrease in gross margin. SG&A as a percentage of sales also declined significantly, reflecting efficiency gains Gross Margin This section details the performance and key aspects of the Gross Margin - Reported gross margin for the quarter decreased 50 basis points versus year ago to 49.1%[14][32] - Core gross margin decreased 70 basis points (50 basis points on a currency-neutral basis)[14][53] - The decrease was driven by 150 basis points of unfavorable product mix, 70 basis points of product/package reinvestments, 40 basis points of higher commodity costs, and 40 basis points of higher costs from tariffs[14] Selling, General and Administrative (SG&A) Expense This section details the performance and key aspects of the Selling, General and Administrative (SG&A) Expense - Reported selling, general and administrative expense (SG&A) as a percentage of sales declined 240 basis points versus the prior year to 28.3%[15][32] - Core and currency-neutral SG&A as a percentage of sales declined 220 basis points versus year ago[15][53] - The decline was driven by 320 basis points of productivity savings (including reductions across marketing and overhead costs) and 60 basis points of net sales growth leverage[15] Operating Margin This section details the performance and key aspects of the Operating Margin - Reported operating margin for the quarter increased 190 basis points to 20.8%, due primarily to productivity savings[16][32] - Core operating margin for the quarter increased 150 basis points versus the prior year and 170 basis points on a currency-neutral basis[16][53] - Core operating margin included gross productivity savings of 560 basis points[16] Strategic Initiatives and Restructuring This section outlines P&G's strategic initiatives, including market portfolio restructuring and a new productivity plan to enhance cost structure and competitiveness Limited Market Portfolio Restructuring P&G initiated a limited market portfolio restructuring in fiscal year 2024, primarily in Enterprise Markets like Argentina and Nigeria, to address challenging macroeconomic conditions. This restructuring was completed in Q1 FY2025, resulting in $0.8 billion after-tax incremental restructuring charges, mainly non-cash foreign currency translation losses from the substantial liquidation of operations in Argentina - The Company started a limited market portfolio restructuring in fiscal year 2024, primarily in certain Enterprise Markets (Argentina and Nigeria), to address challenging macroeconomic and fiscal conditions[17] - The restructuring was completed in the July-September 2024 quarter of fiscal year 2025 with the substantial liquidation of its operations in Argentina[18] - Incremental restructuring charges of $0.8 billion after tax were recorded, comprised primarily of non-cash charges for accumulated foreign currency translation losses[18] Focused Portfolio, Supply Chain and Productivity Plan In June 2025, P&G announced a new portfolio and productivity plan aimed at improving its cost structure and competitiveness. This plan is expected to incur $1 to $1.6 billion before-tax in non-core restructuring costs over a two-year period, including a reduction of up to 7,000 non-manufacturing overhead personnel by the end of fiscal 2027 - In June 2025, the Company announced a portfolio and productivity plan to focus its portfolio and organization to improve its cost structure and competitiveness[19] - The Company expects to incur non-core restructuring costs of approximately $1 to $1.6 billion before-tax over a two-year period[19] - These restructuring activities include a plan for a reduction in non-manufacturing overhead personnel of up to 7,000 by the end of fiscal 2027[19] Fiscal Year 2026 Guidance This section provides P&G's financial guidance for fiscal year 2026, covering sales, earnings per share, anticipated financial impacts, and capital allocation plans Sales Growth Outlook P&G projects fiscal year 2026 all-in sales growth in the range of one to five percent versus the prior year. Organic sales growth is expected to be flat to up four percent, with a 30 to 50 basis point headwind from brand and product discontinuations | Metric | Range | | :------------------ | :---------- | | All-in Sales Growth | +1% to +5% | | Organic Sales Growth | 0% to +4% | - All-in sales growth includes a one percent benefit from the net impacts of foreign exchange rates and acquisitions and divestitures[20] - Organic sales growth includes a growth headwind of 30 to 50 basis points from brand and product form discontinuations[20] Earnings Per Share (EPS) Outlook P&G forecasts fiscal 2026 diluted net EPS growth in the range of 3% to 9% versus fiscal 2025 GAAP EPS of $6.51. Core EPS growth is projected to be flat to up four percent versus fiscal 2025 Core EPS of $6.83, equating to a range of $6.83 to $7.09 per share | Metric | Range | | :------------------ | :---------- | | Diluted EPS Growth | +3% to +9% | | Core EPS Growth | 0% to +4% | - GAAP EPS includes an expected gain from the exit of the Glad Joint Venture with Clorox in the range of $0.10 to $0.13 per share and non-core restructuring charges of $0.12 to $0.25 per share[21] - The mid-point estimate for Core EPS is $6.96, representing an increase of 2%[21] Financial Impacts and Headwinds P&G anticipates significant headwinds in fiscal 2026, including approximately $200 million after-tax from unfavorable commodity costs, $250 million after-tax from higher net interest expense and its core effective tax rate, and $1 billion before-tax (approximately $800 million after-tax) from higher tariffs. These are partially offset by a $300 million after-tax tailwind from foreign exchange rates, resulting in a net headwind of $0.39 per share, or a six percent drag on core EPS growth | Impact | Amount (After-Tax) | | :------------------------------------ | :----------------- | | Unfavorable commodity costs | ~$200 million | | Higher net interest expense & tax rate | ~$250 million | | Higher tariffs | $800 million | | Foreign exchange rates (tailwind) | +$300 million | | Net Headwind | ~$0.39 per share (6% drag on Core EPS growth) | - The core effective tax rate is expected to be in the range of 20% to 21% in fiscal 2026, approximately one point higher than the fiscal 2025 level[23] Capital Allocation and Cash Flow For fiscal 2026, P&G estimates capital spending to be in the range of four to five percent of net sales. The company expects adjusted free cash flow productivity of 85% to 90% and plans to return approximately $15 billion to shareholders through $10 billion in dividends and $5 billion in share repurchases - Capital spending is estimated to be in the range of four to five percent of fiscal 2026 net sales[24] - Adjusted free cash flow productivity is expected to be 85% to 90%[24] - The Company expects to pay around $10 billion in dividends and to repurchase approximately $5 billion of common shares in fiscal 2026[24] Forward-Looking Statements and Risk Factors This section highlights the inherent risks and uncertainties associated with forward-looking statements, covering global economic, geopolitical, and operational factors Overview This section outlines that the release contains forward-looking statements subject to various risks and uncertainties that could cause actual results to differ materially. These risks encompass global financial and economic volatility, geopolitical conditions, supply chain disruptions, cost fluctuations, competitive pressures, brand reputation, third-party relationships, IT systems, disease outbreaks, innovation, acquisitions/divestitures, productivity, regulatory changes, and environmental sustainability - Forward-looking statements are based on current expectations and assumptions, which are subject to risks and uncertainties that may cause results to differ materially[25] - Key risks include managing global financial risks (e.g., foreign currency, interest rates, tariffs), economic volatility, changing political and geopolitical conditions, supply chain disruptions, cost fluctuations, and competitive factors[26] - Other risks involve maintaining brand equity, managing third-party relationships, relying on IT systems, staying innovative, managing acquisition/divestiture activities, achieving productivity improvements, and navigating regulatory and legal requirements[26] Company Information This section provides an overview of Procter & Gamble, detailing its global presence and portfolio of trusted consumer brands About Procter & Gamble Procter & Gamble is a global consumer goods company serving consumers worldwide with a strong portfolio of trusted, quality, leadership brands. The P&G community includes operations in approximately 70 countries - P&G serves consumers around the world with one of the strongest portfolios of trusted, quality, leadership brands[28] - The P&G community includes operations in approximately 70 countries worldwide[28] - Key brands include Always®, Ariel®, Bounty®, Crest®, Dawn®, Gillette®, Pampers®, Tide®, and Vicks®[28] Consolidated Financial Statements This section presents P&G's consolidated GAAP financial statements, including earnings, segment performance, cash flows, and balance sheet information Consolidated Earnings Information (GAAP) This section presents the detailed GAAP income statement for the fourth quarter and fiscal year ended June 30, 2025, compared to the prior year, showing net sales, gross profit, operating income, and net earnings, along with key margin percentages, highlighting overall financial performance | Metric | Q4 2025 | Q4 2024 | % Chg (Q4) | FY 2025 | FY 2024 | % Chg (FY) | | :------------------------------------ | :-------- | :-------- | :---------- | :-------- | :-------- | :---------- | | NET SALES | $20,889M | $20,532M | 2% | $84,284M | $84,039M | 0% | | GROSS PROFIT | $10,258M | $10,183M | 1% | $43,120M | $43,191M | 0% | | OPERATING INCOME | $4,355M | $3,884M | 12% | $20,451M | $18,545M | 10% | | NET EARNINGS | $3,626M | $3,144M | 15% | $16,065M | $14,974M | 7% | | Diluted EPS | $1.48 | $1.27 | 17% | $6.51 | $6.02 | 8% | | Gross margin | 49.1% | 49.6% | (50) BPS | 51.2% | 51.4% | (20) BPS | | Operating margin | 20.8% | 18.9% | 190 BPS | 24.3% | 22.1% | 220 BPS | Consolidated Earnings Information by Segment This section provides a breakdown of net sales, earnings before income taxes, and net earnings by business segment for both the fourth quarter and fiscal year 2025, along with the percentage change versus the prior year. It also details the sales drivers (volume, foreign exchange, price, mix) for each segment, offering granular insights into performance | Segment | Net Sales (Q4 2025) | % Chg YoY (Q4) | Earnings Before Income Taxes (Q4 2025) | % Chg YoY (Q4) | Net Earnings (Q4 2025) | % Chg YoY (Q4) | | :---------------------- | :------------------ | :------------- | :--------------------------------------- | :------------- | :--------------------- | :------------- | | Beauty | $3,733M | 0% | $708M | 3% | $557M | 4% | | Grooming | $1,683M | 2% | $458M | 16% | $371M | 19% | | Health Care | $2,722M | 2% | $487M | 12% | $372M | 14% | | Fabric & Home Care | $7,385M | 2% | $1,751M | 10% | $1,375M | 11% | | Baby, Feminine & Family Care | $5,093M | 2% | $1,217M | 10% | $948M | 12% | | Corporate | $274M | N/A | $(100)M | N/A | $4M | N/A | | TOTAL | $20,889M | 2% | $4,521M | 17% | $3,626M | 15% | | Segment | Net Sales (FY 2025) | % Chg YoY (FY) | Earnings Before Income Taxes (FY 2025) | % Chg YoY (FY) | Net Earnings (FY 2025) | % Chg YoY (FY) | | :---------------------- | :------------------ | :------------- | :--------------------------------------- | :------------- | :--------------------- | :------------- | | Beauty | $14,964M | (2)% | $3,454M | (9)% | $2,715M | (8)% | | Grooming | $6,662M | 0% | $1,952M | 6% | $1,577M | 7% | | Health Care | $11,998M | 2% | $3,149M | 7% | $2,440M | 8% | | Fabric & Home Care | $29,617M | 0% | $7,459M | 2% | $5,848M | 3% | | Baby, Feminine & Family Care | $20,248M | 0% | $5,214M | (1)% | $4,013M | 0% | | Corporate | $794M | N/A | $(1,061)M | N/A | $(527)M | N/A | | TOTAL | $84,284M | 0% | $20,167M | 7% | $16,065M | 7% | Consolidated Statements of Cash Flows The consolidated statements of cash flows for fiscal years 2025 and 2024 show a decrease in total operating activities cash flow from $19.8 billion to $17.8 billion, an increase in investing activities outflow, and a decrease in financing activities outflow, impacting the overall cash position | Activity | FY 2025 | FY 2024 | | :------------------------------------ | :-------- | :-------- | | TOTAL OPERATING ACTIVITIES | $17,817M | $19,846M | | TOTAL INVESTING ACTIVITIES | $(3,818)M | $(3,504)M | | TOTAL FINANCING ACTIVITIES | $(14,036)M | $(14,855)M | | CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | $75M | $1,235M | | CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF YEAR | $9,556M | $9,482M | Condensed Consolidated Balance Sheets The condensed consolidated balance sheets as of June 30, 2025, and 2024 show an increase in total assets to $125.2 billion, driven by increases in current assets, property, plant & equipment, and goodwill. Total liabilities also increased to $72.9 billion, while total shareholders' equity grew to $52.3 billion | Item | June 30, 2025 | June 30, 2024 | | :------------------------------------ | :-------------- | :-------------- | | TOTAL ASSETS | $125,231M | $122,370M | | TOTAL LIABILITIES | $72,946M | $71,811M | | TOTAL SHAREHOLDERS' EQUITY | $52,284M | $50,559M | - Total current assets increased from $24,709 million in 2024 to $25,392 million in 2025[38] - Goodwill increased from $40,303 million in 2024 to $41,650 million in 2025[38] Non-GAAP Measures and Reconciliations This section defines and reconciles P&G's non-GAAP financial measures, providing clarity on core operational performance for both quarterly and annual periods Definitions of Non-GAAP Measures This section defines the non-GAAP financial measures used by P&G, including Core earnings, Organic sales growth, Core EPS, Core gross margin, Core SG&A, Core operating margin, Adjusted free cash flow, and Adjusted free cash flow productivity. These measures are utilized by management for operational decisions, resource allocation, and performance evaluation, providing supplemental insight into underlying business trends by excluding non-recurring or unusual items - Non-GAAP measures provide useful perspective on underlying business trends and results, excluding non-recurring or unusual items[39] - Core earnings measures adjust for incremental restructuring and intangible asset impairment charges[40][41] - Organic sales growth is a measure of sales growth excluding the impacts of acquisitions and divestitures and foreign exchange[43] Fourth Quarter 2025 Non-GAAP Reconciliation This section provides the reconciliation of GAAP to non-GAAP measures for the fourth quarter of fiscal year 2025, detailing adjustments for incremental restructuring charges to derive Core gross margin, SG&A, operating margin, and EPS, offering a clearer view of underlying operational performance | Metric | GAAP (2025) | GAAP (2024) | Incremental Restructuring (2024) | Core (2024) | | :------------------------------------ | :---------- | :---------- | :------------------------------- | :---------- | | Gross profit | $10,258M | $10,183M | $45M | $10,229M | | Gross margin | 49.1% | 49.6% | 0.2% | 49.8% | | Operating income | $4,355M | $3,884M | $73M | $3,958M | | Operating margin | 20.8% | 18.9% | 0.4% | 19.3% | | Diluted EPS | $1.48 | $1.27 | $0.13 | $1.40 | | Metric | Change vs. Year Ago | | :------------------------------------ | :------------------ | | Core gross margin | (70) BPS | | Currency-neutral Core gross margin | (50) BPS | | Core selling, general and administrative expense as a % of net sales | (220) BPS | | Currency-neutral Core selling, general and administrative as a % of net sales | (220) BPS | | Core operating margin | 150 BPS | | Currency-neutral Core operating margin | 170 BPS | | Core EPS | 6% | | Currency-neutral Core EPS | 5% | Fiscal Year 2025 Non-GAAP Reconciliation This section provides the reconciliation of GAAP to non-GAAP measures for fiscal year 2025, detailing adjustments for incremental restructuring charges and intangible asset impairment to derive Core gross margin, SG&A, operating margin, and EPS, offering a comprehensive view of annual performance excluding specific non-recurring items | Metric | GAAP (2025) | Incremental Restructuring (2025) | Core (2025) | GAAP (2024) | Incremental Restructuring (2024) | Intangible Impairment (2024) | Core (2024) | | :------------------------------------ | :---------- | :------------------------------- | :---------- | :---------- | :------------------------------- | :--------------------------- | :---------- | | Gross profit | $43,120M | $(20)M | $43,099M | $43,191M | $70M | $0M | $43,261M | | Gross margin | 51.2% | 0% | 51.1% | 51.4% | 0.1% | 0% | 51.5% | | Operating income | $20,451M | $5M | $20,456M | $18,545M | $103M | $1,341M | $19,988M | | Operating margin | 24.3% | 0% | 24.3% | 22.1% | 0.1% | 1.6% | 23.8% | | Diluted EPS | $6.51 | $0.33 | $6.83 | $6.02 | $0.15 | $0.42 | $6.59 | | Metric | Change vs. Year Ago | | :------------------------------------ | :------------------ | | Core gross margin | (40) BPS | | Currency-neutral Core gross margin | (20) BPS | | Core selling, general and administrative expense as a % of net sales | (80) BPS | | Currency-neutral Core selling, general and administrative as a % of net sales | (70) BPS | | Core operating margin | 50 BPS | | Currency-neutral Core operating margin | 50 BPS | | Core EPS | 4% | | Currency-neutral Core EPS | 4% | Organic Sales Growth Reconciliation This section reconciles reported net sales growth to organic sales growth for Q4 and FY2025 by adjusting for foreign exchange impacts and acquisition/divestiture impacts. It also provides the estimated organic sales growth for FY2026, offering a consistent view of underlying sales trends | | Net Sales Growth | Foreign Exchange Impact | Acquisition & Divestiture Impact/Other | Organic Sales Growth | | :---------------- | :--------------- | :---------------------- | :----------------------------------- | :------------------- | | Q4 2025 Total Company | 2% | 0% | 0% | 2% | | FY 2025 Total Company | 0% | 1% | 1% | 2% | | | Net Sales Growth | Combined Foreign Exchange & Acquisition/Divestiture Impact | Organic Sales Growth | | :---------------- | :--------------- | :------------------------------------------------- | :------------------- | | FY 2026 (Estimate) Total Company | +1% to +5% | -1% | 0% to +4% | Core EPS Growth Reconciliation This section reconciles diluted EPS growth to Core EPS growth for the estimated fiscal year 2026, by adjusting for the impact of changes in non-core items, providing a clearer forecast of core earnings performance | | Diluted EPS Growth | Impact of change in Non-Core Items | Core EPS Growth | | :---------------- | :----------------- | :------------------------------- | :-------------- | | FY 2026 (Estimate) Total Company | +3% to +9% | -3% to -5% | 0% to +4% | Adjusted Free Cash Flow and Productivity Reconciliation This section provides the reconciliation for adjusted free cash flow and adjusted free cash flow productivity for Q4 and FY2025, detailing the calculation from operating cash flow and net earnings, offering insights into the company's cash generation efficiency | Metric | Q4 2025 Amount | | :--------------------------- | :------------- | | Operating Cash Flow | $4,985M | | Capital Spending | $(996)M | | Adjusted Free Cash Flow | $3,989M | | Net Earnings | $3,626M | | Adjusted Free Cash Flow Productivity | 110% | | Metric | FY 2025 Amount | | :--------------------------- | :------------- | | Operating Cash Flow | $17,817M | | Capital Spending | $(3,773)M | | 2017 U.S. Tax Act Payments | $562M | | Adjusted Free Cash Flow | $14,606M | | Net Earnings | $16,065M | | Adjustments to Net Earnings (1) | $752M | | Net Earnings as Adjusted | $16,817M | | Adjusted Free Cash Flow Productivity | 87% | - (1) Adjustments to Net Earnings relate to a non-cash charge for accumulated foreign currency translation losses due to the substantial liquidation of operations in Argentina[60]