Executive Summary
The Procter & Gamble Company (PG) reported robust financial results for Q2 2025, showcasing a 3% rise in organic sales across various categories despite a challenging economic environment marked by volatility in consumer behavior and input costs. This quarter brought a net income increase of 33.51% year-over-year alongside a solid earnings per share (EPS) of $1.88, demonstrating the company's resilience amid disruptions. Management has guided for continued organic sales growth, projecting an annual increase of 3-5% amidst ongoing challenges in global markets and foreign exchange pressures. With an adaptive strategy focusing on innovation and operational efficiency, PG remains well-positioned for sustained growth in the latter half of the fiscal year.
Key Performance Indicators
Key Insights
1. **Revenue:** $21.88 billion, up 2.06% YoY, 0.67% QoQ; solid growth attributed to broad category performance.
2. **Operating Income:** $5.74 billion, a 29.51% increase YoY, indicating effective cost management.
3. **Net Income:** $4.63 billion, representing a 33.51% YoY growth; EPS at $1.88 (up 34.72% YoY).
4. **Gross Margin:** At 52.39%, slightly down due to competitive pricing pressures.
5. **Free Cash Flow:** $3.9 billion, demonstrating strong cash generation and a firm footing for ...
Financial Highlights
1. Revenue: $21.88 billion, up 2.06% YoY, 0.67% QoQ; solid growth attributed to broad category performance.
2. Operating Income: $5.74 billion, a 29.51% increase YoY, indicating effective cost management.
3. Net Income: $4.63 billion, representing a 33.51% YoY growth; EPS at $1.88 (up 34.72% YoY).
4. Gross Margin: At 52.39%, slightly down due to competitive pricing pressures.
5. Free Cash Flow: $3.9 billion, demonstrating strong cash generation and a firm footing for shareholder returns.
Income Statement
Metric |
Value |
YoY Change |
QoQ Change |
Revenue |
21.88B |
2.06% |
0.67% |
Gross Profit |
11.46B |
1.48% |
1.31% |
Operating Income |
5.74B |
29.51% |
-0.97% |
Net Income |
4.63B |
33.51% |
16.95% |
EPS |
1.94 |
34.72% |
17.58% |
Key Financial Ratios
operatingProfitMargin
26.2%
operatingCashFlowPerShare
$2.05
freeCashFlowPerShare
$1.66
dividendPayoutRatio
52.7%
Management Commentary
- Sales Strategy: CFO Andre Schulten highlighted that organic sales growth was driven by a solid 4% increase in North America, benefiting from strong volume growth and recovery post-disruptions.
- Market Share: CEO Jon Moeller emphasized broad-based growth across categories, with nine of ten product categories witnessing growth, specifically noting double-digit growth in Family Care.
- Operational Challenges: Management acknowledged supply chain volatility impacting operating expenses but credited their teams for overcoming significant operational hurdles during the quarter.
"We are committed to the integrated strategy that has enabled our strong results... to deliver balanced top and bottom-line growth and value-creation." - Jon Moeller, CEO
â Jon Moeller
"Organic sales for the quarter grew 3%, with volume contributing 2 points and mix adding 1 point to growth." - Andre Schulten, CFO},
â Andre Schulten
Forward Guidance
Management has maintained its guidance for fiscal year 2025, anticipating organic sales growth of 3% to 5% notwithstanding the adverse impacts of rising commodity costs and unfavorable foreign exchange effects. With an expected adjusted free cash flow productivity of 90%, PG remains committed to returning $16-$17 billion to shareholders through dividends and stock repurchases.