Procter & Gamble first-quarter core EPS rises to $2.00 as organic sales grow 4.0%

The Procter & Gamble Company (PG) said in a regulatory filing that organic sales rose 4.0% in the first quarter of fiscal 2027 from a year earlier, while core earnings per share were $2.00, up 1%. The results cover the three months ended Sept. 30, 2026.

The company issued a press release on Thursday and hosted a conference call on the results. It also furnished a set of presentation slides under Item 7.01 of Form 8-K, and the figures below come from those slides.

Here's how the company did:

• Organic sales: up 4.0% from a year earlier
• Net sales growth: 4.0% from a year earlier
• Core EPS: $2.00 vs. $1.99 a year earlier, up 1%
• Diluted EPS: $1.97 vs. $1.95 a year earlier
• Currency-neutral core EPS: $1.99, flat from a year earlier

Organic volume rose 2.4%, mix added 1.1% and pricing added 0.4%. Foreign exchange and acquisitions and divestitures had no effect on net sales growth in the quarter.

Growth was broad, the slides said. All 10 product categories and all six regions grew organic sales. Twenty-nine of the company's top 50 category and country combinations held or grew value share in the fiscal year to date, and global aggregate value share was in line with the prior year.

The 4.0% organic gain compares with 1.6% in the same quarter a year earlier and 0.5% in the fourth quarter of fiscal 2026.

Core gross margin was 50.0%, down 150 basis points from 51.5%. Gross margin was 49.8%, compared with 51.4% a year earlier.

Core operating margin was 25.9%, down 80 basis points from 26.7%. Currency-neutral core operating margin was 25.8%, down 90 basis points. Operating margin was 25.5%, compared with 26.2%.

Core EPS excludes incremental restructuring charges, which were $0.03 per share in the quarter against $0.04 a year earlier. Under the portfolio and productivity plan announced in June 2025, the company expects about $2 billion in before-tax restructuring costs over two years. More than half of those costs were incurred in fiscal 2026, and the rest is expected in fiscal 2027.

Core earnings also exclude the January 2026 expiry of the Glad joint venture with Clorox. Clorox bought the company's minority interest at fair market value for $476 million, and the company recorded an after-tax gain of $261 million.

Operating cash flow was $5,767 million and capital spending was $1,366 million, leaving free cash flow of $4,401 million. Net earnings were $4,757 million, and free cash flow productivity was 93%.

The company maintained its fiscal 2027 organic sales growth guidance of 1% to 3%. It updated net sales growth guidance to 2% to 4%. Core EPS growth guidance of 0% to 3% and all-in EPS growth guidance of 1% to 5% were both maintained. Currency-neutral core EPS growth is guided at 0% to 3%.

Net sales guidance includes a combined foreign exchange and acquisition and divestiture impact of minus 1%. The organic sales outlook includes a headwind of 30 to 50 basis points from brand, product form and go-to-market discontinuations.

The guidance base for fiscal 2026 is core EPS of $6.89 and all-in EPS of $6.62. The slides list $1.4 billion in after-tax costs from higher energy, transportation and raw material prices, $50 million in after-tax foreign exchange headwinds, $300 million in after-tax higher net interest expense and $150 million in after-tax lower non-operating income.

The company expects a core effective tax rate of 20% to 21%, free cash flow productivity of 85% to 90% and capital spending of 4.5% to 5.5% of sales. The guidance table also lists dividends above $10 billion and direct share repurchases of about $5 billion.

The slides list potential headwinds not included in guidance. They are a deceleration of market growth rates, currency weakness, commodity cost increases, additional geopolitical disruptions, supply chain disruption or store closures, and tariff changes.

Beauty organic sales rose 5.4% on volume growth of 2.2%, but net earnings fell 1%. The company said marketing investments, higher commodity costs and product mix more than offset sales growth and productivity savings. Global Personal Care and Skin Care value shares each decreased.

Grooming organic sales rose 4.5%, with pricing up 3.5% and volume down 0.4%. Net earnings rose 3%, and Global Grooming value share increased 0.2 points.

Health Care organic sales rose 2.7%, with volume down 2.9%. Net earnings rose 9%. Global Personal Health Care value share increased 0.5 points, while Global Oral Care value share decreased 0.6 points.

Fabric and Home Care organic sales rose 4.8% on volume growth of 4.3%. Net earnings rose 3%. Global Fabric Care value share increased 0.4 points, and Global Home Care value share was in line with the prior year.

Baby, Feminine and Family Care organic sales rose 3.0%, with volume up 2.3%. Net earnings fell 4%. Global Baby Care value share increased 0.8 points, while Global Family Care value share decreased 0.5 points.

The slides said cost headwinds are expected to increase over the next few quarters and that volatility remains.