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The Procter & Gamble Company (NYSE:PG) has released its financial results for the fourth quarter and fiscal year 2025, showcasing a mix of achievements and challenges. This article delves into the company’s performance for the recent quarter, comparing it with expectations, and discusses the guidance for the upcoming fiscal year.
Procter & Gamble Report Modest Increase in Net Sales for Q4 FY’25
Procter & Gamble reported a two percent increase in net sales for the fourth quarter of 2025, reaching $20.9 billion. This performance slightly surpassed the market’s expectation of $20.8 billion. The company’s diluted earnings per share (EPS) for the quarter stood at $1.48, which is above the anticipated EPS of $1.43. This positive outcome was driven by a combination of higher pricing and a favorable product mix, each contributing to a one percent increase in sales growth.
Comparing the fourth quarter of 2025 to the same period in 2024, Procter & Gamble saw a significant 17 percent increase in diluted EPS, attributed primarily to the absence of restructuring charges that impacted the previous year’s results. The core EPS also rose by six percent, indicating robust underlying business performance.
While the gross margin for the quarter decreased by 50 basis points compared to the previous year, the operating margin improved by 190 basis points. This improvement was mainly due to productivity savings, which offset the unfavorable product mix and higher commodity costs. These results reflect the company’s ability to navigate cost pressures while maintaining operational efficiency.
PG Expects All-in Sales Growth to Range Between 1%-5% for FY’26
Looking ahead, Procter & Gamble has set its sights on a promising fiscal year 2026. The company expects all-in sales growth to range from one to five percent, with an anticipated organic sales growth between flat and four percent. This guidance considers a headwind from brand and product form discontinuations, which could impact growth by 30 to 50 basis points.
For fiscal year 2026, Procter & Gamble projects diluted net earnings per share growth between three and nine percent, compared to the fiscal 2025 GAAP EPS of $6.51. The company also expects core EPS to grow between flat and four percent, which translates to a range of $6.83 to $7.09 per share. This forecast includes potential headwinds from unfavorable commodity costs and higher net interest expenses.
The company plans to continue its focus on cost management and productivity enhancements. Capital spending is estimated to be four to five percent of net sales, while adjusted free cash flow productivity is expected to range from 85 to 90 percent. Procter & Gamble anticipates paying around $10 billion in dividends and repurchasing approximately $5 billion of common shares, demonstrating its commitment to returning value to shareholders.
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