P&G caps steady year with stronger-than-expected Q4
By Josh White
Date: Tuesday 29 Jul 2025
(Sharecast News) - Procter & Gamble posted stronger-than-expected fourth-quarter earnings on Tuesday, capping a steady financial year in which the consumer goods giant increased profits and returned over $16bn to shareholders.
However, the company warned that rising tariffs and other headwinds will weigh on growth in 2026.
For the April to June quarter, P&G reported net sales of $20.9bn, up 2% year-on-year, while diluted earnings per share rose 17% to $1.48, ahead of Wall Street expectations.
Core earnings per share rose 6% from the prior year.
Organic sales also increased 2%, driven by pricing and favourable mix, while operating cash flow was $5bn.
The results closed out a flat but resilient 2025 financial year for the maker of Tide, Pampers and Gillette, with full-year revenue holding steady at $84.3bn.
Organic sales rose 2% and diluted earnings per share climbed 8% to $6.51.
Core earnings per share rose 4% to $6.83.
P&G generated $17.8bn in operating cash flow and returned $9.9bn in dividends and $6.5bn through buybacks.
"Our teams grew sales and profit in fiscal 2025 and returned high levels of cash to shareowners in a dynamic, difficult and volatile environment," said CEO Jon Moeller.
"We remain committed to our integrated strategy ... all aimed at delivering sustainable, balanced growth and value creation."
Segment-level performance in the fourth quarter was broadly positive.
Health care, grooming, fabric and home care, and baby, feminine and family care each posted 1% to 2% organic sales growth.
Beauty was flat overall, with gains in personal care offset by weakness in hair and skin care.
Operating margins rose 190 basis points, driven by productivity savings, though core gross margin fell due to input costs and reinvestments.
Looking ahead, P&G said it expected 2026 organic sales to grow between 0% and 4%, and core earnings per share to rise by up to 4%, translating to a range of $6.83 to $7.09.
But the company also flagged an expected $1bn pre-tax hit from tariffs, mostly from the US under president Donald Trump's policy, along with higher commodity and financing costs.
Those were expected to reduce core earnings per share growth by six percentage points, or 39 cents per share.
Chief financial officer Andre Schulten said tariffs would prompt mid-single-digit price increases on about a quarter of the portfolio in the first quarter, noting that some imported materials cannot be sourced domestically.
While productivity gains and sourcing changes would offset much of the impact, "some of the costs will be passed on through price increases," he added.
The outlook included $800m in after-tax costs from tariffs, partially offset by a $300m tailwind from favourable exchange rates.
P&G said it also expected to pay about $10bn in dividends and repurchase $5bn of shares in the 2026 financial year.
Separately, P&G announced that COO Shailesh Jejurikar would succeed Moeller as CEO on 1 January 2026.
Moeller would become executive chairman.
The leadership change came as the company continued a restructuring plan to shed up to 7,000 non-manufacturing jobs and streamline its portfolio.
At 0908 EDT (1408 BST), shares in the Procter & Gamble Company were up 0.89% in premarket trading in New York, at $158.43.
Reporting by Josh White for Sharecast.com.
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