Procter & Gamble Company (NYSE:PG), maker of popular brands such as Gillette, Tide, Pampers and Crest, released its fourth-quarter earnings report on Tuesday and issued the fiscal 2026 outlook.
Gillette maker reported fourth-quarter adjusted earnings per share of $1.48, beating the analyst consensus estimate of $1.42.
Quarterly sales of $20.889 billion (+2% year over year) outpaced the street view of $20.765 billion.
Organic sales, which exclude the impacts of foreign exchange and acquisitions and divestitures, also increased 2%.
Higher pricing and favorable mix impacts contributed a 1% increase in sales growth.
Organic sales grew across all segments, with Beauty, Grooming, Fabric & Home Care, and Baby, Feminine & Family Care each increasing by 1% and Health Care rising by 2% year over year.
Reported gross margin for the quarter under review decreased 50 basis points to 49.1% year over year.
Core gross margin for the quarter decreased 70 basis points compared to the same quarter a year ago, or 50 basis points on a currency-neutral basis.
Operating margin jumped 190 basis points to 20.8% in the quarter under review.
In June 2025, the company announced a portfolio and productivity plan aimed at improving its cost structure and competitiveness.
As part of the plan, it expects to incur $1 to $1.6 billion in non-core restructuring costs over two years, including reducing up to 7,000 non-manufacturing overhead roles by the end of fiscal 2027.
Half of the costs are expected to be incurred by the end of fiscal 2026, with the rest in fiscal 2027. The company exited the quarter with cash and equivalents worth $9.482 billion.
Outlook
Procter & Gamble expects fiscal 2026 adjusted EPS in the range of $6.83 to $7.09, compared with the $6.99 consensus estimate.
The company projects FY2026 sales between $85.126 billion and $88.498 billion, versus the estimated $86.492 billion. GAAP EPS is forecasted between $6.71 and $7.09, compared with the $6.95 estimate.
The company estimates a headwind of around $200 million after-tax from unfavorable commodity costs and a net headwind of roughly $250 million after-tax from modestly higher net interest expense.
Procter & Gamble sees a headwind of 39 cents per share for fiscal 2026, or a 6% drag on core EPS growth.
The company's outlook includes around $1 billion before-tax, or approximately $800 million after-tax, in higher costs from tariffs.
"In fiscal 2026, we expect to deliver another year of organic sales growth, Core EPS growth and strong adjusted free cash flow productivity," said Chief Executive Officer Jon Moeller.
Management Transition
In a separate release, the firm announced that Shailesh Jejurikar, currently Chief Operating Officer, will succeed Jon Moeller as Procter & Gamble's President and Chief Executive Officer, effective January 1, 2026.
The board has also nominated Jejurikar to stand for election as a Director at the annual shareholder meeting in October 2025.
On January 1, 2026, Jon Moeller will become Procter & Gamble's Executive Chairman.
Price Action: PG shares are trading higher by 0.10% to $157.27 at last check Tuesday.
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