P&G(US:PG)2025-10-24 20:24Financial Performance - Net sales for the quarter increased 3% to $22.4 billion, driven by higher pricing (1%), favorable mix (1%), and favorable foreign exchange (1%) [94]. - Net earnings were $4.8 billion, an increase of $794 million, or 20%, compared to the prior year period, primarily due to higher operating income and a decrease in the effective tax rate [100]. - Diluted EPS increased 21% to $1.95, while core EPS increased 3% to $1.99 [101]. - Operating cash flow was $5.4 billion, with adjusted free cash flow at $4.9 billion, resulting in adjusted free cash flow productivity of 102% [94]. - Net earnings decreased 3% to $718 million, with a net earnings margin decline of 120 basis points due to a gross margin decrease of 170 basis points [110]. - Corporate net sales increased $79 million to $242 million, with net earnings increasing $743 million to $36 million due to prior year restructuring charges [118]. - For the three months ended September 30, 2024, the net earnings attributable to Procter & Gamble were $3,959 million, with an increase of $801 million, resulting in total net earnings of $4,761 million [136]. - The diluted net earnings per common share increased to $1.93, up from $1.61, reflecting a growth of 19.9% [136]. - The operating income for the period was reported at $5,797 million, showing a 5% increase compared to the previous period [136]. - The cost of products sold amounted to $10,421 million, with a slight increase of 20 million, leading to a total of $10,441 million in core (Non-GAAP) terms [136]. - Selling, general and administrative expenses decreased by $25 million, resulting in a total of $5,494 million [136]. - Other non-operating income/(expense) showed a significant improvement, moving from a loss of $554 million to a net income of $235 million [136]. - Income taxes for the period were reported at $1,152 million, reflecting a decrease of 7% [136]. Sales and Segment Performance - For the three months ended September 30, 2025, net sales were distributed as follows: Beauty 19%, Grooming 8%, Health Care 15%, Fabric & Home Care 35%, Baby, Feminine & Family Care 23% [79]. - Beauty segment net sales increased 6% to $4.1 billion, with a unit volume increase of 4% [103]. - Grooming segment net sales increased 5% to $1.8 billion, driven by innovation-driven pricing and favorable foreign exchange [105]. - Health Care segment net sales increased 2% to $3.2 billion, with a 2% decline in unit volume offset by favorable product mix and pricing [109]. - Fabric & Home Care net sales increased 1% to $7.8 billion, driven by favorable foreign exchange of 2% and higher pricing of 1%, while organic sales were unchanged [111]. - Oral Care net sales increased low single digits, with unit volume declines across all regions except Latin America, where it increased due to distribution gains [113]. - Personal Health Care net sales increased low single digits, with organic sales driven by mid-teens growth in Latin America, partially offset by a mid-single-digit decline in North America [113]. - Baby, Feminine & Family Care net sales increased 1% to $5.2 billion, with organic sales unchanged [115]. Restructuring and Costs - The company incurred approximately $1.2 billion in restructuring charges after tax due to a limited market portfolio restructuring, primarily in Argentina and Nigeria [80]. - A focused portfolio and productivity plan was announced, expecting to incur $1.5 to $2.0 billion in before-tax restructuring costs over two years, with up to 7,000 non-manufacturing overhead personnel reductions planned by the end of fiscal 2027 [81][82]. - The company expects to receive approximately $500 million in cash proceeds from the termination of the Glad joint venture agreement, with an after-tax gain estimated between $250 million and $300 million [84]. - Total SG&A spending increased 2% to $5.6 billion, while SG&A as a percentage of net sales decreased 20 basis points to 25.2% [96]. - Gross margin decreased 70 basis points to 51.4% of net sales, impacted by higher costs from tariffs and unfavorable product mix [96]. Market and Economic Exposure - More than half of the company's sales are generated outside the United States, with significant exposure to global macroeconomic factors and geopolitical tensions [85]. - The company's Russia business accounted for 1% of consolidated net sales, net earnings, and net assets as of June 30, 2025, highlighting exposure to geopolitical risks [85]. - The company faces significant foreign exchange exposure, impacting net sales, net earnings, and cash flows due to fluctuations in foreign currencies [86]. - Commodity and input material price fluctuations, particularly for oil-derived materials and pulp, directly affect the company's costs and profitability [87]. - As of September 30, 2025, current liabilities exceeded current assets by $10.9 billion, with strong short- and long-term debt ratings supporting refinancing [123]. - There have been no material changes in the Company's exposure to market risk since June 30, 2025 [137]. Cash Flow and Financial Health - Operating cash flow was $5.4 billion fiscal year to date, an increase of $1.1 billion versus the prior year period [119]. - Adjusted free cash flow was $4.896 billion after accounting for capital spending and transitional tax payments [128]. Market Share - Global market share of the Fabric Care category decreased 0.9 points, while the Home Care category increased 0.4 points [114].