Procter & Gamble Co. (NYSE:PG) reported fiscal second-quarter 2026 results that presented a mixed picture, with earnings meeting internal targets but revenue falling short of Wall Street's expectations. The consumer goods giant's stock traded lower in pre-market activity following the release.
Quarterly Performance Versus Estimates
The company's performance for the quarter ended December 31, 2025, highlighted a challenging environment for volume growth, offset by disciplined pricing and cost management.
- Revenue: P&G reported net sales of $22.21 billion, a 1% increase year-over-year. This figure came in below the analyst consensus estimate of approximately $22.95 billion.
- Earnings Per Share: The company's core (non-GAAP) earnings per share were $1.88, unchanged from the prior year. This result was slightly above the analyst estimate of $1.916 per share.
The divergence between the top and bottom-line performance versus estimates is a key focal point. While P&G controlled costs to deliver on profitability, its sales growth did not meet the market's anticipated pace.
Market Reaction and Price Action
The immediate market reaction reflected disappointment with the revenue miss. In pre-market trading, PG shares were down approximately 1.4%. This negative move contrasts with the stock's generally flat performance over the past month and a modest gain over the past two weeks, suggesting investors were positioned for a stronger report.
Key Takeaways from the Earnings Release
Beyond the headline numbers, P&G's report detailed several important dynamics:
- Flat Organic Sales: Stripping out the impacts of foreign exchange, acquisitions, and divestitures, organic sales were unchanged versus the prior year. A 1% increase from higher pricing was completely offset by a 1% decline in shipment volumes.
- Segment Performance Varied Widely: The company's five business segments showed significant divergence:
- Beauty was the standout, with organic sales up 4%.
- Health Care organic sales grew 3%.
- Grooming and Fabric & Home Care each reported flat organic sales.
- Baby, Feminine & Family Care was the weakest, with organic sales down 4%.
- Strong Cash Generation and Shareholder Returns: The company generated $5.0 billion in operating cash flow and returned $4.8 billion to shareholders through dividends ($2.5 billion) and share repurchases ($2.3 billion).
Updated Fiscal 2026 Guidance
Management maintained its full-year outlook for organic sales growth, projecting a range of in-line to up 4%. However, it adjusted its forecast for GAAP diluted EPS growth downward to a range of 1% to 6%, from a prior range of 3% to 9%, citing higher non-core restructuring charges.
Crucially, the company maintained its core EPS growth guidance of in-line to up 4% versus fiscal 2025 core EPS of $6.83. This equates to a range of $6.83 to $7.09, with a midpoint of $6.96. The company's core EPS midpoint guidance of $6.96 is slightly below the current analyst consensus estimate for full-year 2026 EPS of $7.18.
Looking Ahead
For the upcoming fiscal third quarter, analysts are currently estimating revenue of approximately $21.30 billion and earnings per share of about $1.63. Investors will be watching closely to see if P&G's confidence in a stronger second-half performance, as expressed by CEO Shailesh Jejurikar, materializes and reverses the volume declines seen in Q2.
For a detailed look at Procter & Gamble's historical earnings and future analyst estimates, you can review the data here.
Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial analysis, or a recommendation to buy or sell any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
