Core Insights - Procter & Gamble (P&G) exceeded Wall Street expectations for its fiscal first-quarter performance, with earnings of $4.75 billion or $1.95 per share, surpassing the anticipated $1.90 per share [1][2] - The company reported revenue of $22.39 billion, which also exceeded Wall Street's estimate of $22.15 billion, with a 6% increase in the beauty segment and a 5% rise in grooming sales [2] - P&G has revised its forecast for tariff-related costs in fiscal 2026 to $400 million after-tax, down from a previous estimate of $800 million [3] Financial Performance - For the three months ended September 30, P&G's earnings per share, excluding restructuring costs, were $1.99 [1] - The company anticipates full-year earnings between $6.83 and $7.09 per share, maintaining its sales growth guidance of 1% to 5% [6] - Analysts predict full-year earnings of $6.97 per share based on current projections [6] Tariff Impact - P&G previously announced a price increase on about 25% of its U.S. products due to higher costs associated with tariffs [4] - The company has been actively working to mitigate the impact of tariffs through various strategies, including shifting sourcing and changing product formulations [4] - The overall impact of tariffs on companies remains uncertain, particularly in light of recent trade negotiations and political developments [5]

Financial Data and Key Metrics Changes - The first quarter of fiscal 2026 saw organic sales growth of 2%, marking 40 consecutive quarters of organic sales growth and keeping the company on track for the 10th consecutive fiscal year of core EPS growth [3][4] - Core earnings per share (EPS) were $1.99, up 3% compared to the prior year, with core gross margin down 50 basis points and core operating margin equal to the prior year [7][19] - Adjusted free cash flow productivity was 102%, with $3.8 billion returned to shareholders, including $2.55 billion in dividends and $1.25 billion in share repurchases [7][20] Business Line Data and Key Metrics Changes - Skin and personal care led growth with high single-digit increases, while hair care, grooming, personal health care, home care, and baby care each grew low singles [4][5] - Oral care and feminine care were in line with the prior year, while fabric care and family care were down low single digits [4][5] - Six of seven regions held or grew organic sales, with North America up 1% and Latin America up 7% [6][19] Market Data and Key Metrics Changes - Global aggregate market share decreased by 30 basis points, with 24 of the top 50 category-country combinations holding or growing share [6][7] - Greater China organic sales grew 5%, with Pampers and SK-II each growing double digits [5][6] - European focus markets' organic sales were equal to the prior year, with strong growth in France and Spain offset by weaker performance in Germany and Italy [5][6] Company Strategy and Development Direction - The company is focusing on increased investment in its integrated growth strategy, emphasizing consumer-centric approaches and driving superiority across all product categories and retail channels [8][16] - A significant innovation program is underway, including the launch of Tide's biggest upgrade in 20 years and the introduction of Tide Evo, a new laundry detergent [9][10] - The company is actively managing its portfolio, including restructuring efforts to enhance efficiency and effectiveness, with plans to reduce up to 7,000 non-manufacturing roles [12][15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging operating environment with heightened competitive activity in the U.S. and Europe, but expressed confidence in the company's strategy and its ability to drive market growth [16][19] - The company maintained its guidance for fiscal 2026, expecting organic sales growth in line to plus 4% and core EPS growth in line to plus 4% [17][19] - Management highlighted the importance of innovation and integrated superiority to navigate the competitive landscape and drive sustainable growth [18][19] Other Important Information - The company is experiencing a shift in consumer behavior, with a focus on value rather than affordability, leading to positive price mix dynamics [48][49] - The restructuring program aims to create a more agile organization and improve execution capabilities, with a focus on digital enablement and data-driven decision-making [15][27] Q&A Session Summary Question: How is the restructuring being received internally? - Management reported that the organization is adapting well to the restructuring, with clear plans in place to create a more agile and effective organization [24][25] Question: What is the competitive landscape in North America for fabric care and baby care? - Management noted heightened competitive activity, particularly in promotions, but emphasized the importance of innovation and integrated superiority to drive sustainable growth [30][31] Question: What are the implications of the global market share decline? - Management acknowledged the decline but pointed out that absolute share in the U.S. is improving, indicating a positive trend despite competitive pressures [38][39] Question: How is the company addressing consumer affordability? - Management clarified that value is central to the consumer equation, with a focus on integrated performance rather than just price [48][49] Question: What is the outlook for Greater China? - Management expressed confidence in the progress made in China, highlighting strong growth in key categories and the effectiveness of recent interventions [44][45]

Financial Data and Key Metrics Changes - Organic sales growth for the first quarter of fiscal 2026 was 2%, marking 40 consecutive quarters of organic sales growth [2][5] - Core earnings per share (EPS) increased by 3% year-over-year to $1.99, with a currency-neutral basis also reflecting a 3% increase [5] - Core gross margin decreased by 50 basis points, while core operating margin remained equal to the prior year [5] - Adjusted free cash flow productivity was reported at 102%, with $3.8 billion returned to shareholders, including $2.55 billion in dividends and $1.25 billion in share repurchases [5][19] Business Line Data and Key Metrics Changes - Skin and personal care led growth with high single-digit increases, while hair care, grooming, personal health care, home care, and baby care grew in low single digits [3][4] - Oral care and feminine care remained flat compared to the prior year, while fabric care and family care saw declines in low single digits [3] - In North America, organic sales were up 1%, with consumption decelerating throughout the quarter [3][4] Market Data and Key Metrics Changes - Organic sales in Greater China grew by 5%, with Pampers and SK-II each achieving double-digit growth [4] - Latin America saw organic sales increase by 7%, driven by strong growth in Mexico and Brazil [4] - Global aggregate market share decreased by 30 basis points, with 24 of the top 50 category-country combinations holding or growing share [4][5] Company Strategy and Development Direction - The company is focusing on increased investment in its integrated growth strategy, emphasizing consumer-centric approaches and innovation [6][15] - Plans include significant upgrades to core products, such as Tide's liquid detergent, and the introduction of new products like Tide Evo [8][10] - The restructuring program aims to enhance agility and efficiency, with a target of reducing up to 7,000 non-manufacturing roles [14][26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging competitive environment, particularly in the U.S. and Europe, but expressed confidence in the company's strategy to drive growth [5][15] - The guidance for fiscal 2026 maintains organic sales growth expectations of 2% to 4%, with core EPS growth also projected in the same range [16][17] - Management highlighted the importance of innovation and integrated superiority to navigate the current market challenges [15][38] Other Important Information - The company is actively managing its portfolio to enhance dollar-based returns and has made strategic exits from underperforming categories in certain markets [12][73] - The company expects to return approximately $15 billion to shareholders in fiscal 2026, including $10 billion in dividends and $5 billion in share repurchases [19] Q&A Session Summary Question: How is the restructuring being received internally? - Management reported that the organization is adapting well to the restructuring, with clear plans in place for role reductions and organizational changes aimed at creating a more agile company [24][25] Question: What is the competitive landscape in North America for fabric care and baby care? - Management noted heightened competitive activity in both categories, with a focus on driving integrated superiority through innovation rather than just promotions [30][31] Question: What are the reasons for the decline in global market share? - Management indicated that the decline is influenced by increased promotional activity and competitive aggressiveness, particularly in the U.S. and Europe, but noted improvements in absolute share over recent months [36][38] Question: How is the company addressing consumer affordability? - Management emphasized that value, defined as price over integrated performance, is central to their strategy, with a focus on optimizing price points and product offerings across all tiers [50][51] Question: What is the outlook for the rest of the world, particularly in Western Europe and Latin America? - Management described Western Europe as having similar dynamics to North America, while Latin America continues to show strong growth, particularly in Brazil and Mexico [72][73]

Financial Data and Key Metrics Changes - Organic sales growth was rounded up to 2%, with volume in line with the prior year, and pricing and mix each up 1% [4][8] - Core earnings per share (EPS) were $1.99, up 3% versus the prior year, with a currency-neutral basis also showing a 3% increase [8][9] - Core gross margin decreased by 50 basis points, while core operating margin remained equal to the prior year [9] Business Line Data and Key Metrics Changes - Skin and Personal Care led growth with high single-digit increases, while Hair Care, Grooming, Personal Health Care, Home Care, and Baby Care each grew low singles [4][5] - Oral Care and Feminine Care were in line with the prior year, while Fabric Care and Family Care were down low single digits [5] - The U.S. Fabric Care and Baby Care categories faced heightened competitive activity, impacting performance [40][41] Market Data and Key Metrics Changes - Organic sales in Greater China grew by 5%, with Pampers and SK II each growing double digits [7] - Latin America organic sales were up 7%, driven by strong growth across Mexico and Brazil [7] - Global aggregate market share decreased by 30 basis points, with 24 of the top 50 category country combinations holding or growing share [8][46] Company Strategy and Development Direction - The company is focusing on increased investment in its integrated growth strategy, emphasizing consumer-centric approaches [11][22] - Plans include driving superiority across all value tiers, retail channels, and consumer segments, with a strong innovation program [12][22] - The restructuring program aims to create a more agile organization, reducing up to 7,000 non-manufacturing roles to enhance efficiency [21][36] Management's Comments on Operating Environment and Future Outlook - Management noted a challenging environment with heightened competitive activity in the U.S. and Europe, but remains confident in the strategy to drive market growth [10][22] - The company expects modest earnings growth over the balance of the year due to increased investments in innovation and competitiveness [25][26] - Guidance for fiscal 2026 includes organic sales growth of in line to plus 4%, with core EPS growth also in line to plus 4% [23][24] Other Important Information - The company returned $3.8 billion to shareholders this quarter, including $2.55 billion in dividends and $1.25 billion in share repurchases [9] - Adjusted free cash flow productivity was reported at 102%, indicating strong performance in cash generation [9] Q&A Session Summary Question: How is the restructuring being received internally? - Management indicated that the organization is adapting well to the restructuring, with clear plans in place for role reductions and organizational changes [33][34] Question: What is the competitive landscape in North America for Fabric Care and Baby Care? - Management acknowledged heightened competition in these categories, leading to increased promotional activity, but emphasized the importance of innovation and integrated superiority as the path forward [40][41] Question: What are the dynamics affecting global market share? - Management noted that while global market share is down 30 basis points, there are positive trends in absolute share in the U.S., with plans in place to drive growth [46][51] Question: What is the outlook for China and the changes made there? - Management expressed confidence in the progress made in China, highlighting strong growth in several categories due to effective interventions and innovation [60][64] Question: How is the company addressing consumer value and affordability? - Management clarified that value, defined as price over integrated performance, is central to their strategy, with continued innovation across all value tiers [68][70]