Procter & Gamble on Tuesday forecast annual results largely below estimates and said it would raise prices on some products in the U.S., a day after naming insider Shailesh Jejurikar as CEO to steer it through tariff uncertainty.
The consumer goods bellwether’s shares were down 1.2 per cent in volatile early trading.
P&G, which topped fourth-quarter estimates, said it would raise prices on about a quarter of its products in the U.S., starting this month, to help offset the cost of new tariffs imposed by U.S. President Donald Trump.
The price hikes have been communicated to retailers such as Walmart and Target and are in the mid-single digits across categories, a spokesperson said, and will be seen on shelves starting in August.
P&G expects fiscal 2026 annual net sales growth of between one and five per cent, largely below estimates of a 3.09 per cent growth.
Market growth slowed from where it was at the start of the year in both the U.S. and in Europe, and volatile macroeconomic, geopolitical and consumer dynamics were resulting in headwinds that were not anticipated at the start of the year, CFO Andre Schulten said during a call with journalists.
“The consumer clearly is more selective in terms of shopping behavior in our categories and we see a desire to find value either by going into larger pack sizes in club channel or online or big box retailers or by lowering the cash outlay,” Schulten said.
The comments from the world’s largest consumer goods maker reinforce how consumers, particularly in the lower-income category, are seeking value as they look to stretch their household budgets. Packaged food maker Nestle said last week that consumers in North America remained weak.
Still, organic sales grew about two per cent in fiscal 2025, driven by P&G’s portfolio of branded pantry staples, as well as higher pricing, particularly for fresher products.
“Given the immense pressure put on U.S. consumers in particular, the organic growth is a very good sign that long-term earnings projections should hold up,” said Brian Mulberry, portfolio manager at Zacks Investment Management.
P&G, which makes household basics spanning from Bounty paper towel to Metamucil fiber supplements, estimated tariffs will increase its costs by about US$1 billion before tax for fiscal 2026. That compares with projections of between US$1 billion and US$1.5 billion made in April.
The company rolled out a restructuring effort in June to exit some brands and cut about 7,000 jobs over the next two years to increase productivity. Prices rose about one per cent in the fourth quarter, while volumes were flat.
P&G expects fiscal 2026 core net earnings per share growth in the range of US$6.83 and US$7.09, compared with estimates of US$6.99, according to estimates compiled by LSEG.
For the three months ended June 30, the company’s revenue rose to US$20.89 billion, topping estimates of US$20.82 billion, while core profit of US$1.48 per share also beat expectations.
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Reporting by Juveria Tabassum in Bengaluru and Jessica DiNapoli in New York; Editing by Sriraj Kalluvila
