Procter & Gamble earnings show tariffs are hitting the basics

Core Insights - Procter & Gamble (P&G) has seen its stock increase over 10,000% since the 1980s, but it has struggled to attract market attention recently [1] - The company's recent quarterly earnings are not expected to significantly change its market status, with geopolitical factors influencing investor behavior [2] Business Backdrop - Over the past decade, P&G has focused on a tighter portfolio of essential brands, moving away from food and smaller brands, which has allowed it to outperform competitors like Unilever [4] - Growth is now more reliant on pricing, product mix, and cost control rather than volume gains from innovation, making the company vulnerable in a tightening consumer environment [5] Quarterly Performance - For the quarter ending December 31, P&G reported $22.2 billion in sales, a 1% increase from the previous year, but organic sales remained flat due to a 1% drop in volume [6] - The decline in volume affected various segments, with Baby, Feminine, and Family Care seeing a 4% drop in organic sales, while Health Care and Beauty performed better due to premium products [7] Margin Pressures - Tariffs have significantly impacted P&G's margins, with an expected $400 million in after-tax tariff costs for fiscal 2026, leading to a 60 basis point decline in margins [8]