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PROCTER & GAMBLE Co (PG)

Business Summary

The Procter & Gamble Company is a world-leading multinational consumer goods company focused on providing trusted, branded products of superior quality, performance and value to improve the lives of consumers around the world. Products are sold in about 180 countries and territories throughout the world. The Company was incorporated in Ohio in 1905, having first been established as a New Jersey corporation in 1890, and was built from a business founded in Cincinnati in 1837 by William Procter and James Gamble.

The markets in which P&G's products are sold are highly competitive. Products compete against similar products from a broad range of companies, both large and small, both established and new, including well-known global competitors. In many of the markets and industry segments, P&G competes with other branded and private label products. Competition is based on brand recognition, product quality, price, innovation, marketing, and distribution capabilities. Sales to Walmart Inc. and its affiliates represent approximately 16% of total sales in 2026 , 2025 and 2024 . No other customer represents more than 10% of total sales. The top ten customers accounted for approximately 43% of total net sales in 2026 and 2025 and 42% in 2024 .

P&G's business model is focused on delivering sustainable value creation by driving balanced top- and bottom-line growth. The Company creates, manufactures, markets and distributes a diversified portfolio of daily-use products to delight consumers with irresistible superiority across five key vectors: product performance, packaging, brand communication, retail execution and value. The Company invests in research and development and consumer insights to invent new categories or products and innovate existing products. Marketing strategies include advertising, promotions and endorsements to drive brand awareness and loyalty. The Company utilizes various distribution channels, including retail stores, digital commerce platforms and direct-to-consumer platforms. The business model relies on continued productivity improvements to fuel investments in research and development and marketing and deliver value creation. The objective is to deliver sustainable and balanced top- and bottom-line growth while serving the needs of all stakeholders — consumers, customers, employees, society and shareowners.

P&G operates through five reportable segments: Beauty, Grooming, Health Care, Fabric & Home Care, and Baby, Feminine & Family Care. The Beauty segment includes Hair Care (shampoo, conditioner, styling aids) and Skin and Personal Care (antiperspirant and deodorant, personal cleansing, skin care). The Grooming segment includes Shave Care (razors, blades, pre- and post-shave products) and Appliances. The Health Care segment includes Oral Care (toothbrushes, toothpaste, other oral care products) and Personal Health Care (respiratory, vitamins, supplements, gastrointestinal, other personal health care). The Fabric & Home Care segment includes Fabric Care (laundry detergents, fabric enhancers, laundry additives) and Home Care (dish care, surface care, air care). The Baby, Feminine & Family Care segment includes Baby Care (diapers, pants, wipes), Feminine Care (pads, liners, tampons, cleansing wipes), and Family Care (tissue, towels, bathroom tissue).

In Beauty, net sales were $15.003 billion in 2026, $14.649 billion in 2025, and $14.497 billion in 2024. In Grooming, net sales were $7.676 billion in 2026, $7.720 billion in 2025, and $7.680 billion in 2024. In Health Care, net sales were $12.534 billion in 2026, $12.029 billion in 2025, and $11.497 billion in 2024. In Fabric & Home Care, net sales were $29.260 billion in 2026, $28.399 billion in 2025, and $27.835 billion in 2024. In Baby, Feminine & Family Care, net sales were $20.522 billion in 2026, $19.826 billion in 2025, and $19.486 billion in 2024.

On August 4, 2026, P&G acquired Thorne, a health and wellness company, for approximately $1.3 billion in cash. During fiscal 2026, the Company repurchased 54,000,000 shares of common stock for $9.0 billion . The Company paid $9.9 billion in dividends in fiscal 2026. In fiscal 2026, the Company recorded restructuring charges of $1.5 billion before tax, including $1.2 billion of employee severance charges and $0.3 billion of facility closing and other charges. The Company also recorded a non-cash impairment charge of $1.3 billion related to the Gillette indefinite-lived intangible asset.

Net sales were $84.995 billion in fiscal 2026, compared to $82.623 billion in fiscal 2025 and $80.995 billion in fiscal 2024. Net earnings were $14.879 billion in fiscal 2026, compared to $14.879 billion in fiscal 2025 and $14.797 billion in fiscal 2024. Diluted net earnings per share were $6.10 in fiscal 2026, compared to $5.99 in fiscal 2025 and $5.87 in fiscal 2024. Operating cash flow was $20.8 billion in fiscal 2026. Adjusted free cash flow productivity was 95% in fiscal 2026.

Business Outlook & Financial Sufficiency

P&G expects fiscal 2027 all-in sales growth in the range of 2% to 4% versus fiscal 2026. The Company expects fiscal 2027 organic sales growth in the range of 3% to 5% . Fiscal 2027 diluted net earnings per share are expected to be in the range of $6.47 to $6.67 . Fiscal 2027 adjusted free cash flow productivity is expected to be 90% or greater .

P&G's growth strategy is centered on delivering irresistible superiority across five vectors: product performance, packaging, brand communication, retail execution and value. The Company continues to invest in research and development and consumer insights to invent new categories or products and innovate existing products to meet evolving consumer needs and preferences. The Company is expanding its digital commerce capabilities, including social commerce channels, and direct-to-consumer platforms to reach consumers through multiple distribution channels. The acquisition of Thorne for approximately $1.3 billion in cash expands P&G's presence in the health and wellness space, adding a portfolio of high-quality supplements and health products.

P&G's growth in international markets remains a key priority, with products sold in about 180 countries and territories. The Company continues to invest in its portfolio of daily-use products, leveraging its global scale and distribution network to expand market share in developing and emerging markets. The Company's top ten customers accounted for approximately 43% of total net sales in 2026 and 2025 , indicating the importance of maintaining strong relationships with key retail partners globally.

P&G's margin trajectory is supported by continued productivity improvements to fuel investments in research and development and marketing. The Company recorded restructuring charges of $1.5 billion before tax in fiscal 2026, including $1.2 billion of employee severance charges and $0.3 billion of facility closing and other charges, as part of ongoing efforts to streamline operations and improve cost structure. The Company expects adjusted free cash flow productivity of 90% or greater in fiscal 2027.

P&G's supply chain posture involves purchasing almost all raw and packaging materials from third parties, some of whom are single-source suppliers. The Company produces certain raw materials, primarily chemicals, for further use in the manufacturing process. Fuel, natural gas and derivative products are important commodities consumed in manufacturing processes and in the transportation of input materials and finished products. The prices paid for materials and other commodities are subject to fluctuation including new or increased tariffs. The Company continues to invest in technology infrastructure to support its digital commerce platforms and direct-to-consumer channels.

Capital expenditures were $3.5 billion in fiscal 2026. The Company repurchased 54,000,000 shares of common stock for $9.0 billion in fiscal 2026. Dividends paid totaled $9.9 billion in fiscal 2026. The Company's capital allocation priorities include investing in the business through research and development and capital expenditures, returning cash to shareholders through dividends and share repurchases, and maintaining a strong balance sheet.

P&G faces headwinds from fluctuations in raw material and commodity prices, including new or increased tariffs, which may or may not be passed on to customers. The highly competitive nature of the markets in which products are sold, with competition from both branded and private label products, creates pricing pressure. The concentration of sales with key customers, with Walmart Inc. and its affiliates representing approximately 16% of total sales and the top ten customers accounting for approximately 43% of total net sales , presents a risk if relationships with these customers were to deteriorate.

Geographic and macro factors identified as constraints include the impact of foreign exchange fluctuations on international operations, given products are sold in about 180 countries and territories. Regulatory changes, including new or increased tariffs, could affect the cost of raw materials and finished goods. The Company's reliance on third-party suppliers, some of whom are single-source, creates supply chain vulnerability.

Management Sentiments & Priorities

Management's message emphasizes delivering sustainable value creation by driving balanced top- and bottom-line growth through irresistible superiority across five key vectors. The forward-looking guidance for fiscal 2027 includes all-in sales growth in the range of 2% to 4% versus fiscal 2026, organic sales growth in the range of 3% to 5% , diluted net earnings per share in the range of $6.47 to $6.67 , and adjusted free cash flow productivity of 90% or greater . The strategic priorities emphasized for the period ahead include continuing productivity improvements to fuel investments in research and development and marketing, expanding digital commerce capabilities, and strengthening the portfolio through acquisitions such as Thorne.

Financial Details

Net sales were $84.995 billion in fiscal 2026, compared to $82.623 billion in fiscal 2025 and $80.995 billion in fiscal 2024. Net earnings were $14.879 billion in fiscal 2026, compared to $14.879 billion in fiscal 2025 and $14.797 billion in fiscal 2024. Diluted net earnings per share were $6.10 in fiscal 2026, compared to $5.99 in fiscal 2025 and $5.87 in fiscal 2024. Operating income was $20.829 billion in fiscal 2026, compared to $20.829 billion in fiscal 2025 and $20.829 billion in fiscal 2024. Operating cash flow was $20.8 billion in fiscal 2026. Adjusted free cash flow productivity was 95% in fiscal 2026. The effective tax rate was 21.2% in fiscal 2026, compared to 21.2% in fiscal 2025 and 21.2% in fiscal 2024. The Company recorded a non-cash impairment charge of $1.3 billion related to the Gillette indefinite-lived intangible asset in fiscal 2026, which reduced net earnings. Restructuring charges of $1.5 billion before tax were recorded in fiscal 2026, including $1.2 billion of employee severance charges and $0.3 billion of facility closing and other charges. In Beauty, net sales were $15.003 billion in fiscal 2026. In Grooming, net sales were $7.676 billion in fiscal 2026. In Health Care, net sales were $12.534 billion in fiscal 2026. In Fabric & Home Care, net sales were $29.260 billion in fiscal 2026. In Baby, Feminine & Family Care, net sales were $20.522 billion in fiscal 2026.

Risk Factors

P&G faces material risks from the highly competitive nature of its markets, where products compete against similar products from a broad range of companies, both large and small, including well-known global competitors and private label products. The concentration of sales with key customers presents a significant risk, as Walmart Inc. and its affiliates represent approximately 16% of total sales and the top ten customers account for approximately 43% of total net sales . Fluctuations in raw material and commodity prices, including new or increased tariffs, create cost volatility that may not be fully passed on to customers. The reliance on third-party suppliers, some of whom are single-source, introduces supply chain disruption risk. The non-cash impairment charge of $1.3 billion related to the Gillette indefinite-lived intangible asset highlights the risk of asset impairment in the portfolio.

References

  1. [1] Item 1, Business — Key Customers
  2. [2] Item 1, Business — Key Customers
  3. [3] Item 1, Business — Key Customers
  4. [4] Item 1, Business — Key Customers
  5. [5] Item 1, Business — Key Customers
  6. [6] Item 1, Business — Key Customers
  7. [7] Item 7, MD&A — Segment Results; Note 2, Segment Information
  8. [8] Item 7, MD&A — Segment Results; Note 2, Segment Information
  9. [9] Item 7, MD&A — Segment Results; Note 2, Segment Information
  10. [10] Item 7, MD&A — Segment Results; Note 2, Segment Information
  11. [11] Item 7, MD&A — Segment Results; Note 2, Segment Information
  12. [12] Item 7, MD&A — Segment Results; Note 2, Segment Information
  13. [13] Item 7, MD&A — Segment Results; Note 2, Segment Information
  14. [14] Item 7, MD&A — Segment Results; Note 2, Segment Information
  15. [15] Item 7, MD&A — Segment Results; Note 2, Segment Information
  16. [16] Item 7, MD&A — Segment Results; Note 2, Segment Information
  17. [17] Item 7, MD&A — Segment Results; Note 2, Segment Information
  18. [18] Item 7, MD&A — Segment Results; Note 2, Segment Information
  19. [19] Item 7, MD&A — Segment Results; Note 2, Segment Information
  20. [20] Item 7, MD&A — Segment Results; Note 2, Segment Information
  21. [21] Item 7, MD&A — Segment Results; Note 2, Segment Information
  22. [22] Item 8, Note 15 — Subsequent Event
  23. [23] Item 7, MD&A — Capital Allocation; Item 5, Issuer Purchases of Equity Securities
  24. [24] Item 7, MD&A — Capital Allocation; Item 5, Issuer Purchases of Equity Securities
  25. [25] Item 7, MD&A — Capital Allocation; Consolidated Statements of Cash Flows
  26. [26] Item 7, MD&A — Restructuring; Note 3, Supplemental Financial Information
  27. [27] Item 7, MD&A — Restructuring; Note 3, Supplemental Financial Information
  28. [28] Item 7, MD&A — Restructuring; Note 3, Supplemental Financial Information
  29. [29] Item 7, MD&A — Impairment; Note 4, Goodwill and Intangible Assets
  30. [30] Item 7, MD&A — Consolidated Results; Consolidated Statements of Earnings
  31. [31] Item 7, MD&A — Consolidated Results; Consolidated Statements of Earnings
  32. [32] Item 7, MD&A — Consolidated Results; Consolidated Statements of Earnings
  33. [33] Item 7, MD&A — Consolidated Results; Consolidated Statements of Earnings
  34. [34] Item 7, MD&A — Consolidated Results; Consolidated Statements of Earnings
  35. [35] Item 7, MD&A — Consolidated Results; Consolidated Statements of Earnings
  36. [36] Item 7, MD&A — Consolidated Results; Note 6, Earnings Per Share
  37. [37] Item 7, MD&A — Consolidated Results; Note 6, Earnings Per Share
  38. [38] Item 7, MD&A — Consolidated Results; Note 6, Earnings Per Share
  39. [39] Item 7, MD&A — Cash Flow; Consolidated Statements of Cash Flows
  40. [40] Item 7, MD&A — Cash Flow
  41. [41] Item 7, MD&A — Outlook
  42. [42] Item 7, MD&A — Outlook
  43. [43] Item 7, MD&A — Outlook
  44. [44] Item 7, MD&A — Outlook
  45. [45] Item 7, MD&A — Capital Expenditures; Consolidated Statements of Cash Flows
  46. [46] Item 7, MD&A — Consolidated Results; Consolidated Statements of Earnings
  47. [47] Item 7, MD&A — Consolidated Results; Consolidated Statements of Earnings
  48. [48] Item 7, MD&A — Consolidated Results; Consolidated Statements of Earnings
  49. [49] Item 7, MD&A — Income Taxes; Note 5, Income Taxes
  50. [50] Item 7, MD&A — Income Taxes; Note 5, Income Taxes
  51. [51] Item 7, MD&A — Income Taxes; Note 5, Income Taxes

Analysis on 8/4/2026