The Procter & Gamble Company (PG) delivered a solid start to fiscal 2026 with QQ1 results that reflect its enduring growth model, resilient cash generation and progress against a challenging macro and competitive backdrop. Reported revenue of $22.386 billion rose roughly 9% year-over-year, topping prior-year comps, while gross profit hit $11.499 billion and net income stood at $4.75 billion. Core earnings per share (EPS) rose 3% on a currency-neutral basis to $1.99, with reported EPS of $2.00 and diluted EPS of $1.95. The quarter marked 40 consecutive quarters of organic sales growth and reinforced P&G’s track record of core EPS growth for the tenth consecutive fiscal year, underscoring the durability of its integrated growth strategy, broad category leadership, and pricing/mix discipline. Net margins remained robust (net income margin ~21.2%), and operating margin was ~26.2%, driven by a 230bp productivity improvement and continued reinvestment in innovation and demand creation.
Management reaffirmed a disciplined, multi-vector strategy emphasizing portfolio superiority, productivity, and organizational restructuring to fund innovation and margin expansion. The company disclosed a two-year restructuring program designed to reduce up to 7,000 non-manufacturing roles (up to 15% of non-manufacturing headcount) and to realize up to $1.5 billion in pre-tax growth savings via Supply Chain 3.0 and related platforms. The actions are expected to bolster operating leverage, support faster decision-making, and free up capital for go-to-market investments and accelerated innovation. Management guided to maintaining all full-year ranges: organic sales growth in line to +4%, a roughly 2% value-based market growth, and core EPS growth in line to +4% for fiscal 2026, with a modest after-tax headwind from tariffs and commodities partially offset by FX tailwinds and savings from restructuring. The company also outlined an objective to return approximately $15 billion in cash to shareholders in fiscal 2026 (dividends around $10 billion and buybacks around $5 billion).
Key near-term considerations include elevated promotional intensity in North America and Europe as competitors respond to macro softness, a softer Q2 ahead given port-strike lapping effects, and ongoing disproportionate volatility in certain markets (notably Greater China and selected enterprise markets). Nonetheless, China and Latin America delivered meaningful gains (Greater China organic sales up mid-single digits to 5% with Baby Care up double digits; Latin America up 7%), signaling that targeted local-market innovations and revamped go-to-market approaches are starting to yield results. Looking ahead, the guidance embeds continued investment in innovation and productivity, with a plan to deliver mid-single-digit top-line growth and mid-single-digit earnings expansion while returning meaningful cash to shareholders. Investors should monitor: (1) the execution cadence of the restructuring and its impact on SG&A and overhead costs; (2) the sustainability of China and Latin American momentum; (3) the progression of Tide evo and other key innovations; (4) potential headwinds from tariffs, currency dynamics, and port-related disruptions; and (5) the pace of margin expansion as Supply Chain 3.0 scale benefits accrue and marketing productivity gains materialize.