Procter & Gamble — Financial Results
Revenue Growth Was Mostly Driven by Currency Tailwinds, Not Volume
| Metric | FY2026 | FY2025 | Change |
|---|---|---|---|
| Net Sales | $87.0B | $84.3B | +3% |
| Organic Sales Growth | — | — | +1% |
| Unit Volume Change | — | — | 0% |
Net sales grew 3%, but strip out foreign exchange (the boost from converting overseas sales into a stronger U.S. dollar) and the picture is more modest: organic sales (the purest measure of underlying demand) grew just 1%. Volume — the actual number of units sold — was flat. Pricing added 1% to organic growth, meaning consumers are buying roughly the same amount but paying slightly more.
Profit Margins Compressed Across the Board
| Metric | FY2026 | FY2025 | Change |
|---|---|---|---|
| Gross Margin | 50.2% | 51.2% | -100 bps |
| Operating Margin | 22.7% | 24.3% | -160 bps |
| Operating Income | $19.7B | $20.5B | -3% |
Gross margin (what is left of each revenue dollar after making the product) fell 1 percentage point, hurt by unfavorable product mix, product and packaging investments, higher restructuring costs, and tariff impacts. Meanwhile, marketing spending increased, pushing SG&A (selling, general and administrative costs) up 60 basis points as a share of sales. Productivity savings of 180 basis points on the manufacturing side partially cushioned the blow, but operating income still fell 3%.
A Major Cost-Cutting Program Is Underway, With More Pain Still to Come
In June 2025, P&G announced a two-year restructuring plan expected to cost $1.5–$2.0 billion before tax, including cutting up to 7,000 non-manufacturing jobs by end of fiscal 2027. The company incurred $903 million after tax in incremental restructuring charges in fiscal 2026 alone, with the remainder expected in fiscal 2027. This is on top of a prior Argentina-related restructuring that cost $1.2 billion after tax in total. These charges are the primary reason reported operating income fell despite higher sales.
Cash Generation Was a Genuine Bright Spot
| Metric | FY2026 | FY2025 | Change |
|---|---|---|---|
| Operating Cash Flow | $19.6B | $17.8B | +10% |
| Adjusted Free Cash Flow | $15.8B | $14.6B | +8% |
| Adjusted Free Cash Flow Productivity | 100% | 87% | +13 pts |
Adjusted free cash flow — essentially the cash left over after capital spending, which funds dividends, buybacks, and acquisitions — hit $15.8 billion, up 8%. Adjusted free cash flow productivity of 100% means P&G converted essentially every dollar of adjusted net earnings into usable cash, well above its own 90% target.
P&G Is Acquiring a Supplements Brand for $3.8 Billion
In August 2026, P&G agreed to acquire Thorne, a premium vitamins, minerals, and supplements brand, for $3.8 billion. The deal is expected to close in the second quarter of fiscal 2027, pending regulatory approval. This moves P&G further into the fast-growing wellness category, bolting onto its existing Personal Health Care segment (home to Metamucil and Pepto-Bismol).
The Gillette Brand Carries a $12.8 Billion Asset Value That Remains Under Pressure
P&G carries Gillette's brand on its books as an intangible asset (a non-physical asset representing brand value) worth $12.8 billion. After a $1.3 billion impairment charge (a write-down acknowledging the asset is worth less than previously stated) in fiscal 2024, the company's latest testing shows the asset's fair value still only exceeds its carrying value by just over 10% — a thin cushion. A relatively small adverse change in currency rates, growth assumptions, or discount rates could trigger another write-down, which would be a non-cash hit to earnings.