P&G(US:PG)2025-10-24 11:04Financial Performance - Net sales for the first quarter of fiscal year 2026 were $22.4 billion, a 3% increase compared to the prior year, with organic sales up 2%[1][5] - Diluted EPS increased by 21% to $1.95, while core EPS rose 3% to $1.99[1][7] - Net sales for the three months ended September 30, 2025, were $22,386 million, a 3% increase compared to $21,737 million in the same period last year[25] - Gross profit increased to $11,499 million, reflecting a 2% growth from $11,316 million year-over-year[25] - Net earnings attributable to Procter & Gamble rose to $4,750 million, marking a 20% increase from $3,959 million in the prior year[25] - Basic net earnings per common share increased by 21% to $2.00, up from $1.65 in the same quarter last year[25] - Organic sales growth for the total company was 2% for the period of July to September 2025, with a net sales growth of 3%[48] Cash Flow and Shareholder Returns - Operating cash flow was $5.4 billion, with net earnings of $4.8 billion for the quarter, and adjusted free cash flow productivity at 102%[2] - The company returned $3.8 billion to shareholders through $2.55 billion in dividends and $1.25 billion in share repurchases[2] - Adjusted free cash flow for the three months ended September 30, 2025, was $4,896 million, calculated from operating cash flow of $5,408 million minus capital spending of $1,200 million and tax payments of $688 million[50] - Adjusted free cash flow productivity was 102%, indicating the company's ability to generate cash relative to net earnings of $4,781 million[51] Guidance and Expectations - P&G maintained its fiscal 2026 sales growth guidance in the range of 1% to 5%, with organic sales growth expected to be in-line to up 4%[11][12] - The company estimates organic sales growth for FY 2026 to be between 0% to 4%[48] - Diluted EPS growth for FY 2026 is estimated to be between 3% to 9%, with an impact of incremental non-core items reducing this by 3% to 5%[49] Costs and Expenses - The company anticipates a commodity cost headwind of approximately $100 million and higher tariff costs of about $400 million for fiscal 2026[14] - Selling, general and administrative expenses as a percentage of net sales decreased to 24.9%, down by 0.3%[44] - Reported gross margin decreased by 70 basis points, while core gross margin decreased by 50 basis points compared to the prior year[8] Investment and Innovation - The company is increasing investment in innovation and demand creation to enhance consumer value and drive category growth[4] - Capital spending is estimated to be 4% to 5% of fiscal 2026 net sales, with expected dividends around $10 billion and share repurchases of approximately $5 billion[17] Tax and Liabilities - P&G's core effective tax rate is expected to be in the range of 20% to 21% for fiscal 2026[16] - The effective tax rate decreased to 20.8% from 22.4% year-over-year[25] - Total current assets increased to $27,118 million, up from $25,392 million as of June 30, 2025[31] - Total liabilities increased to $74,048 million from $72,946 million as of June 30, 2025[31] Other Financial Metrics - Cash and cash equivalents at the end of the period were $11,171 million, compared to $9,556 million at the beginning of the period[29] - The company reported a total operating activities cash flow of $5,408 million, up from $4,302 million in the previous year[29] - Gross margin for the three months ended September 30, 2025, was 51.5%, a slight increase of 0.1% from the previous period[44] - Operating income for the same period was $5,972 million, resulting in an operating margin of 26.7%, up by 0.5%[44] - Net earnings attributable to Procter & Gamble for the three months ended September 30, 2025, were $4,850 million, with diluted net earnings per share at $1.99[44] - Currency-neutral core operating margin increased by 0.4% to 27.1%[44]