Procter & Gamble falls on weak sales, cautious guidance

Investing.com -- Procter & Gamble Co. (NYSE: PG) reported its fourth-quarter results before the open on Wednesday, slightly beating earnings expectations but missing on revenue.

Adjusted earnings per share were $1.43, beating the analyst estimate of $1.42 by $0.01. However, revenue for the quarter came in at $21.2 billion, missing the consensus estimate of $21.42 billion and up 2% YoY. Organic sales were flat versus the prior year.

For fiscal year 2027, the company issued core EPS guidance of $6.89 to $7.11, with a midpoint of $7.00, slightly below the analyst consensus of $7.02. The company expects fiscal 2027 sales growth of 1% to 3% and organic sales growth of 1% to 3%. Shares fell 3.4% following the results.

"Fiscal 2026 was a year of foundation building while continuing to grow sales and profit and return high levels of cash to shareowners despite a very challenging geopolitical and economic environment," said Shailesh Jejurikar, President and Chief Executive Officer.

For the fourth quarter, diluted EPS was $1.26, down 15% YoY, while core EPS of $1.43 decreased 3% from $1.48 in the prior year period. Currency-neutral core EPS decreased 5% versus the prior year.

Across business segments, Beauty organic sales increased 4%, driven by Hair Care and Personal Care growth. Grooming organic sales were flat, while Health Care organic sales decreased 1%. Fabric and Home Care organic sales were unchanged, and Baby, Feminine and Family Care organic sales decreased 2%.

Core gross margin for the quarter was unchanged versus the prior year, as 160 basis points of productivity savings were offset by 120 basis points of unfavorable product mix and 70 basis points of product reinvestments. Core operating margin decreased 130 basis points versus the prior year.

For fiscal 2027, the company estimates headwinds of approximately $1 billion after-tax from higher raw materials, energy and transportation costs, plus $150 million from higher net interest expense. Combined, these impacts represent a headwind of $0.56 per share, or an 8% drag on core EPS growth.

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