The Procter & Gamble Company (PG) Q1 2026 earnings summary

Executive summary

• Net sales for Q1 FY2026 reached $22.4 billion, up 3% year-over-year, with organic sales up 2% driven by pricing and favorable mix, and volume flat.

• Core EPS rose 3% to $1.99, while diluted EPS increased 21% to $1.95, primarily due to lower restructuring charges compared to the prior year.

• Operating cash flow was $5.4 billion, with adjusted free cash flow productivity at 102%.

• Returned $3.8 billion to shareholders in Q1 via dividends and share repurchases.

• Executing a major restructuring and portfolio streamlining to drive agility, cost savings, and innovation investment.

Financial highlights

• Gross margin declined 70 basis points to 51.4%; core gross margin fell 50 basis points to 51.5%.

• Operating margin decreased 50 basis points to 26.2%; core operating margin was flat at 26.7%.

• Net earnings attributable to shareholders rose 20% to $4.75 billion.

• Adjusted free cash flow productivity was 102%.

• Effective tax rate improved to 20.8% from 22.4% year-over-year.

Outlook and guidance

• Fiscal 2026 guidance maintained: organic sales growth in line to +4%, all-in sales growth 1%–5%, core EPS growth in line to +4% ($6.83–$7.09 per share), and diluted EPS growth 3%–9%.

• Q2 expected to be the softest quarter due to prior year port strike impacts; stronger growth anticipated in the second half.

• Commodity and tariff headwinds expected to total $500 million after tax; favorable FX impact of $300 million after tax.

• Core effective tax rate anticipated at 20%–21%; capital spending to be 4%–5% of net sales.

• Plans to pay ~$10 billion in dividends and repurchase ~$5 billion in shares for FY2026.