Executive Summary
The Procter & Gamble Company (PG) reported solid financial results for the first quarter of fiscal year 2025, with revenues reaching $21.74 billion, reflecting a 2% organic sales growth. The company maintained its full-year guidance, citing resilience in core markets despite challenges in regions like China. Notably, P&G achieved strong cash flow metrics, returning nearly $4.4 billion to shareholders through dividends and share buybacks. Management emphasized the effectiveness of their integrated strategy, which has delivered consistent growth over the past quarters. The performance is characterized by stability in North America and Europe, yet marred by persistent headwinds in Asia-Pacific markets, particularly in China.
Key Performance Indicators
QoQ: 26.20% | YoY:-12.43%
QoQ: 26.92% | YoY:-12.70%
Key Insights
Revenue: $21.74 billion (QoQ +5.87%, YoY -0.61%)
Gross Profit: $11.32 billion (Gross Profit Margin: 52.06%)
Operating Income: $5.80 billion (Operating Income Margin: 26.67%)
Net Income: $3.96 billion (Net Income Margin: 18.18%)
EPS: $1.65 (YoY change: -12.70%)
Core EPS: $1.93, increased 5% YoY
Return on Equity: 7.64%
Free Cash Flow: $3.31 billion, with Free Cash Flow Margin of 15.19%
Cash at end of period: $12.16 billion....
Financial Highlights
Revenue: $21.74 billion (QoQ +5.87%, YoY -0.61%)
Gross Profit: $11.32 billion (Gross Profit Margin: 52.06%)
Operating Income: $5.80 billion (Operating Income Margin: 26.67%)
Net Income: $3.96 billion (Net Income Margin: 18.18%)
EPS: $1.65 (YoY change: -12.70%)
Core EPS: $1.93, increased 5% YoY
Return on Equity: 7.64%
Free Cash Flow: $3.31 billion, with Free Cash Flow Margin of 15.19%
Cash at end of period: $12.16 billion.
Income Statement
Metric |
Value |
YoY Change |
QoQ Change |
Revenue |
21.74B |
-0.61% |
5.87% |
Gross Profit |
11.32B |
-0.47% |
11.12% |
Operating Income |
5.80B |
0.52% |
49.21% |
Net Income |
3.96B |
-12.43% |
26.20% |
EPS |
1.65 |
-12.70% |
26.92% |
Key Financial Ratios
operatingProfitMargin
26.7%
operatingCashFlowPerShare
$1.83
freeCashFlowPerShare
$1.4
dividendPayoutRatio
61.8%
Management Commentary
Management noted that organic sales growth was driven by a combination of volume and pricing, contributing one point each to the growth rate. Chief Financial Officer Andre Schulten stated, "Execution of our integrated strategy delivered another quarter of solid earnings and cash results," highlighting the success in maintaining market share in key regions. Notably, Schulten added, "We remain committed to the integrated strategy that has enabled strong results over the past six years," indicating confidence in current and future operations.
Management emphasized, 'Eight of 10 product categories grew or held organic sales for the quarter.'
â Andre Schulten
Andre Schulten stated, 'We are doubling down on all levers to accelerate growth in the coming quarters.'
â Andre Schulten
Forward Guidance
For fiscal year 2025, P&G reaffirmed its organic sales growth guidance of 3% to 5%, indicating expectations for continued resilience despite macroeconomic challenges. Management expects the pace of improvement to be reflected in subsequent quarters as they begin to annualize headwinds, particularly in China. They forecast a 5% to 7% growth in core EPS for the fiscal year, indicating confidence in sustaining profitability amid cost pressures.