The Procter & Gamble Company Q1 FY2026 earnings call

Strategy and Innovation: Focus on integrated growth strategy with innovation across portfolio. Examples include Tide's liquid detergent upgrade, Tide evo launch, upgrades in U.S. Baby Care, premium body wash innovation in Greater China, and strong growth in Latin America Personal Healthcare. Productivity and Restructuring: Aim for growth savings in COGS up to $1.5B before tax via Supply Chain 3.0, improve marketing productivity, reduce overheads, and restructure organization. Announced steps: redesigning business model in Pakistan, discontinuing laundry detergent bars in India and Philippines, exiting low-tier oral care products, focusing Olay on productive European markets, and streamlining grooming device portfolio. Portfolio Management: Actively manage portfolio across markets and brands to generate U.S. dollar-based returns in daily use categories, with steps like different go-to-market choices, surgical exits, and rightsizing production.

Organic sales were up 2%. Skin & Personal Care led growth with high single digits. Hair Care, Grooming, Personal Health Care, Home Care, and Baby Care each grew low singles. Oral Care and Feminine Care were in line with prior year, while Fabric Care and Family Care were down low singles. 6 of 7 regions held or grew organic sales. Focus markets were up over 1%. North America organic sales up 1%. European focus markets equal to prior year with growth in France and Spain, softer in Germany and Italy. Greater China organic sales grew 5%. Latin America organic sales up 7%. Global aggregate market share down 30 basis points, 24 of top 50 category country combinations held or grew share.

Organic sales growth in line to plus 4% (including 30-50 basis point headwind from product/market exits). Core EPS growth in line to plus 4%, range $6.83 to $7.09 per share. Adjusted free cash flow forecasted in range of 85% to 90%. Plan to return ~$15B to shareowners, including ~$10B in dividends and ~$5B in share repurchases.

Geopolitical and competitive environment impact on organic sales/market share; commodity and currency headwinds affecting margins/pricing; supply chain disruptions causing trade inventory volatility; consumer sentiment leading to deceleration in consumption and category growth.

Q: How are organizational changes being received internally and how does the reorg help competitiveness?

A: Progress is on track. Organization is taking changes in stride as mission is clear. Portfolio, supply chain, and headcount reduction components are executing to create a more agile organization.

Q: Competitive activity in North America Fabric Care and Baby Care?

A: Heightened competitive environment with increased promotion. Response is integrated superiority via innovation, communication, and retailer support to drive sustainable growth.

Q: China market performance and confidence?

A: Greater China up 5%, driven by interventions in go-to-market, innovation, and consumer collaboration. Progress is positive but market remains volatile, but team is confident in continued progress.

Q: Affordability and consumer choice?

A: Value is key, not just affordability. P&G is present in all channels, innovating across value tiers, and optimizing price points and pack sizes to meet consumer needs.

Q: Tariff and commodity headwinds impact on guidance?

A: Lower headwinds due to commodity price decline and tariff exclusions. Volatility remains, but investment in innovation is preserved as it's the path to growth.

Q: Regional outlooks and portfolio changes?

A: Western Europe and North America similar to North America dynamics; Latin America strong; Asia, Middle East, Africa enterprise markets muted. Portfolio changes are fringe adjustments to ensure value creation in categories.

Q: Agentic commerce and leveraging advantages?

A: Agentic commerce is opportunity, leveraging consumer understanding, data infrastructure, and retail collaboration to communicate superior brand propositions.

Q: Tariff impact on pricing strategy and LATAM performance?

A: Pricing in U.S. was innovation-driven, tariffs not main contributor. LATAM strong with 7% growth, driven by integrated superiority and consumer value.