Procter & Gamble (PG-N) reported a 4% increase in net sales to US$23.28-billion for its first quarter, surpassing Wall Street estimates of US$22.80-billion. The company attributed this growth to strong demand for its beauty and home-care products, particularly higher-priced hair-care items, as consumers continued to prioritize self-care despite rising household costs.
However, P&G warned that higher commodity-related costs would reduce its fiscal 2027 profit by about US$1.4-billion, up from its previous estimate of US$1-billion. The increase in raw material, energy, and transportation costs led to an 80 basis point drop in core operating margin, despite productivity savings of 250 basis points. The company cited elevated fuel prices and a shortage of truck drivers as key challenges.
P&G is taking steps to mitigate these costs, including negotiating with suppliers, optimizing transportation routes, and investing in product innovation. The company maintained its fiscal 2027 forecasts for organic sales growth of 1% to 3% and core earnings of roughly US$7 per share. First-quarter core earnings were reported at US$2 per share, exceeding analysts’ estimate of US$1.88.
In other news, Swiss packaged-goods maker Nestle (NSRGY) also reported stronger-than-expected organic sales growth. P&G’s shares were up about 2% in premarket trading following the earnings report.