Procter & Gamble 8-K
EarningsGuidance reaffirmed
Thorne acquisition resets FY2027 all-in sales growth outlook to +2%–4%; commodity costs and product reinvestments squeeze margins.
Filed 2026-10-22 07:02 ET
- 2.02 Results of Operations
- 9.01 Financial Statements and Exhibits
Summary
Q1 FY2027 results: net sales and organic sales each rose 4% Y/Y, while diluted and core EPS each increased 1%. P&G updated FY2027 all-in sales growth guidance to reflect the Thorne acquisition and maintained its organic sales, EPS growth, and cash-return outlook.
Key Figures
| Metric | Q1 FY2027 |
|---|---|
| Net sales | $23.3B, +4% Y/Y |
| Organic sales growth (non-GAAP) | +4% Y/Y |
| Gross margin | 49.8%, vs 51.4% |
| Operating income | $5.94B, +1% Y/Y |
| Net earnings attributable to P&G | $4.73B, —% Y/Y |
| Diluted EPS | $1.97, +1% Y/Y |
| Core EPS (non-GAAP) | $2.00, +1% Y/Y |
| Operating cash flow | $5.77B, +7% Y/Y |
| Free cash flow | $4.40B, +5% Y/Y |
- Organic sales growth reflected 2.4% volume growth and favorable mix; pricing had a minor positive impact. Higher operating costs partly offset sales growth. Gross margin declined 160 bp, driven mainly by commodity costs and product reinvestments.
- Free cash flow productivity was 93%. P&G returned $3.9B to shareholders: $2.60B in dividends and $1.25B in share repurchases. Diluted weighted average shares fell 1.2% to 2.41B from 2.44B.
- After-tax FY2027 headwinds: ≈$1.4B from commodities, $300M from higher net interest expense, $150M from lower non-operating income, and $50M from foreign exchange; together, these represent $0.79 per share and an 11% drag on core EPS growth.
Guidance
| Metric | Period | Guidance | Prior | Direction |
|---|---|---|---|---|
| All-in net sales growth | FY2027 | +2% to +4% | — | — |
| Organic sales growth | FY2027 | +1% to +3% | — | Reaffirmed |
| Diluted EPS growth | FY2027 | +1% to +5% | — | Reaffirmed |
| Core EPS growth and per-share range (non-GAAP) | FY2027 | In-line to +3%; $6.89-$7.11 per share, midpoint $7.00 | — | Reaffirmed |
| Core effective tax rate (non-GAAP) | FY2027 | 20%-21% | — | — |
| Capital spending as a percentage of net sales | FY2027 | 4.5%-5.5% | — | — |
| Free cash flow productivity (non-GAAP) | FY2027 | 85%-90% | — | Reaffirmed |
| Dividends | FY2027 | Over $10B | — | — |
| Common-share repurchases | FY2027 | ≈$5B | — | — |
The all-in sales outlook was updated for the Thorne acquisition, effective 10/01/2026. The organic sales outlook includes a 30-50 bp headwind from brand, product-form, and go-to-market discontinuations.
Guidance changes, derived from earlier filings
| Metric | Period | Earlier guidance | Guidance now | Change |
|---|---|---|---|---|
| All-in net sales growth | FY2027 | +1% to +3% | +2% to +4% | raised |
| Organic sales growth | FY2027 | +1% to +3% | +1% to +3% | reaffirmed |
| Diluted EPS growth | FY2027 | +1% to +5% | +1% to +5% | reaffirmed |
| Core EPS growth and per-share range (non-GAAP) | FY2027 | +0% to +3% | In-line to +3%; $6.89-$7.11 per share, midpoint $7.00 | narrowed (raised low end) |
| Core effective tax rate (non-GAAP) | FY2027 | ≈20% | 20%-21% | widened (raised high end) |
| Capital spending as a percentage of net sales | FY2027 | 4.5% to 5.5% | 4.5%-5.5% | reaffirmed |
| Free cash flow productivity (non-GAAP) | FY2027 | 85% to 90% | 85%-90% | reaffirmed |
| Dividends | FY2027 | >$10B | Over $10B | reaffirmed |
| Common-share repurchases | FY2027 | ≈$5B | ≈$5B | reaffirmed |
| Currency-neutral Core EPS growth (non-GAAP) | FY2027 | +0% to +3% | +0% to +3% | reaffirmed |
Investor Takeaways
- Watch whether volume and mix sustain organic growth within the FY2027 outlook as cost pressures weigh on margins and EPS.
The summary is written by an AI model reading the filing.
Model 005 · prompt v95 · 2026-10-22 14:34:56Z