P&G flags bigger hit to annual profit from higher commodity costs, beats revenue estimates
PG•P&G raised its fiscal 2027 commodity-cost hit estimate to about $1.4 billion from $1 billion, while keeping its organic sales growth target at 1% to 3%. First-quarter net sales rose 4% to $23.28 billion, above estimates.
1. Higher cost forecast
Procter & Gamble said higher raw material, energy and transportation costs are now expected to reduce fiscal 2027 profit by about $1.4 billion, up from its previous estimate of $1 billion. Core operating margin fell 80 basis points in the quarter ended September 30, despite 250 basis points of productivity savings.
2. Sales beat estimates
First-quarter net sales rose 4% to $23.28 billion, above analysts’ estimate of $22.80 billion. Core earnings were $2 per share, compared with analysts’ estimate of $1.88, while volumes rose 2.4% and prices increased about 0.4%.
3. Outlook maintained
P&G maintained its fiscal 2027 forecasts for organic sales growth of 1% to 3% and core earnings of roughly $7 per share. The company said it is investing in product innovation, negotiating with suppliers and optimizing transportation routes to contain costs.
