The Zhitong Finance App learned that before the US stock market on October 22 (Thursday), Procter & Gamble (PG.US) announced financial results for the first quarter of the 2027 fiscal year. According to financial reports, the company's Q1 net sales were $233 billion, up 4% year over year, higher than the forecast of about $22.8 billion; core earnings per share were $2.00, up 1% year over year, higher than the forecast of $1.89. The company previously indicated a year-on-year decline of 5% or more in core EPS for the quarter; in fact, there was no decline but an increase.
Organic sales, which the market is most concerned about, increased by 4%, far exceeding the agreed expectations of about 2% (the most optimistic investment banks, UBS and Evercore ISI also forecast only 2.6% to 3%).
The volume-price structure improved markedly: sales contributed 2.4%, product portfolio contributed 1.1%, and pricing contributed 0.4%, reversing the pattern of “growth entirely dependent on exchange rates and price increases, with zero sales contribution” in the previous fiscal year. Organic sales in all five segments are growing positively: beauty, textile and home care, and barber care all increased by about 5%, while infant, female, home care, and health care all increased by about 3%.
Gross margin is still under pressure: core gross margin of 50.0%, down 150 basis points year over year, slightly weaker than expected of 50.3%. In terms of attribution, rising commodity costs dragged down about 140 basis points, and product reinvestment dragged down about 140 basis points, partly offset by 120 basis point productivity savings and tariff cost reductions; core operating margins fell 80 basis points to 25.9%, including 250 basis points of productivity savings.
In terms of full-year guidance, the company maintained organic sales growth of 1% to 3% and core EPS of 6.89-7.11 US dollars (flat to 3% increase year over year), which is in line with market expectations of “no substantial adjustments”; however, it raised the 2027 commodity cost headwind forecast from about $1 billion to about $1.4 billion (after tax), combined with reduced interest expenses, non-operating income, and exchange rate effects, which together dragged EPS growth by about 11%.
Due to the completion of the acquisition of health products company Thorne on October 1, the company updated its full-caliber net sales growth guide to 2% to 4%, and maintained a full-year free cash flow productivity of 85% to 90%, dividends exceeding $10 billion, and plans to repurchase approximately $5 billion.
Chairman and CEO Shailesh Jejurikar said a strong start to the fiscal year kept the company on track to achieve full-year organic growth, core EPS growth, and free cash flow productivity guidance ranges.