Core Insights - Procter & Gamble reported strong fourth-quarter fiscal 2025 results, with sales and earnings per share (EPS) exceeding estimates and showing year-over-year improvement [2][3] - The company anticipates continued organic sales growth and core EPS growth for fiscal 2026, despite facing some cost headwinds [10][11] Financial Performance - Procter & Gamble's net sales reached $20.9 billion, a 2% increase year over year, surpassing the Zacks Consensus Estimate of $20.8 billion [3] - Core EPS for the quarter was $1.48, a 6% increase from the previous year, beating the consensus estimate of $1.43 [2] - The core gross margin declined by 70 basis points to 49.1%, impacted by adverse product mix and higher commodity costs [5] - The core operating margin expanded by 150 basis points to 20.8%, supported by gross productivity savings [7] Segment Performance - Sales growth was driven by a 2% increase in the Baby, Feminine & Family Care, Fabric & Home Care, Grooming, and Health Care segments, while the Beauty segment remained flat [4] - Organic sales rose 1% for several segments, with a 2% increase in the Health Care segment [4] Cash Flow and Shareholder Returns - Procter & Gamble ended fiscal 2025 with cash and cash equivalents of $9.6 billion and generated an operating cash flow of $5 billion [8] - The company returned over $16 billion to shareholders in fiscal 2025, including $9.9 billion in dividends and $6.5 billion in share buybacks [9] Fiscal 2026 Guidance - For fiscal 2026, Procter & Gamble expects all-in sales growth of 1-5% and core EPS growth of 3-9% compared to fiscal 2025 [10] - The company anticipates a commodity cost headwind of $200 million and a $1 billion cost headwind from tariffs [11] - Capital expenditure is projected to be 4-5% of net sales, with adjusted free cash flow productivity estimated at 85-90% [12] Market Sentiment - Since the earnings release, there has been a downward trend in estimates for Procter & Gamble, indicating a potential shift in market sentiment [13][15] - The stock currently holds a Zacks Rank 3 (Hold), suggesting an expectation of in-line returns in the near term [15]
P&G (PG) Up 2.7% Since Last Earnings Report: Can It Continue?