Profit Outlook Pressured by Tariffs
Procter & Gamble is bracing for a challenging fiscal year ahead, warning investors on Tuesday that new tariffs will reduce profits by $1 billion. The consumer goods giant said this impact will weigh on its earnings-per-share guidance, with the lower end of the range falling short of Wall Street expectations. Despite the caution, shares edged slightly higher in premarket trading following better-than-expected fourth-quarter results.
The tariff-related pressure comes as the company navigates a shifting global trade landscape, with new U.S. import duties reshaping costs for global manufacturers. Trump administration policies continue to impact multinational companies like P&G, which rely heavily on international supply chains for their raw materials and distribution.
Leadership Change at the Top
Alongside earnings, P&G announced that Chief Operating Officer Shailesh Jejurikar will succeed Jon Moeller as CEO on January 1, 2026. Jejurikar, a P&G veteran since 1989, is known for leading the company’s global fabric and home care divisions, including flagship brands like Tide.
Moeller, who has served as CEO since 2021, will transition to executive chairman. Analysts, including those at JPMorgan, noted that Jejurikar’s promotion was widely expected given his appointment as COO in 2021 and his extensive international leadership experience across developed and emerging markets.
Mixed Results Across Product Segments
For the fiscal fourth quarter, Procter & Gamble reported net sales of $20.9 billion, up 2% year-over-year and slightly above estimates. Adjusted earnings per share came in at $1.48, beating the $1.42 consensus and rising 6% compared to the same period last year.
However, growth varied across product categories:
- Beauty: +1% organic revenue (vs. +1.6% estimate)
- Grooming: +1% (vs. +2.46%)
- Healthcare: +2% (vs. +3.57%)
- Fabric & Home Care: +1% (vs. +1.76%)
- Baby, Feminine & Family Care: +1% (vs. +1.37%)
The softness in key segments like fabric care and baby products suggests cautious consumer behavior amid ongoing economic uncertainty.
Forward Guidance Signals Volatility
For the full year ahead, P&G projects organic sales growth between 0% and 4%, compared to the consensus estimate of 2.54%. Earnings guidance ranges from $6.83 to $7.09 per share, straddling analyst expectations of $6.99. The wide range reflects both pricing pressures from tariffs and muted volume expectations.
As P&G prepares for leadership transition and trade headwinds, the company appears focused on defending margins and adapting its product strategy to meet evolving consumer preferences and cost realities.
