Procter & Gamble Shares: A Quarter of Contrasts

Procter & Gamble US7427181091

Procter & Gamble's second-quarter results for fiscal 2026, released on January 22, painted a nuanced picture. The consumer goods behemoth delivered a mixed performance, with earnings surpassing forecasts while revenue fell short. Despite a notable slowdown in its crucial U.S. market, the Cincinnati-based company reaffirmed its full-year outlook.

On the profitability front, Procter & Gamble posted encouraging figures. The company reported core earnings per share of $1.88, exceeding the $1.86 consensus estimate from market analysts. However, on a GAAP basis, diluted earnings per share declined by five percent to $1.78, a drop attributed to elevated restructuring charges. Net income for the quarter stood at $4.32 billion, compared to $4.63 billion in the prior-year period.

Revenue Misses the Mark Amid U.S. Weakness

The company's top-line performance told a different story. Net sales reached $22.21 billion for the quarter ended December 31, representing a modest one percent year-over-year increase. This figure, however, missed analyst expectations of $22.28 billion. More notably, organic sales growth—which strips out the impacts of foreign exchange and acquisitions—was flat. Management pointed to restrained consumer spending in the United States as the primary cause. A government shutdown in October and November delayed critical food assistance payments, eroding purchasing power in P&G's most important market.

Divergent Performance Across Business Segments

The quarterly results revealed significant divergence among the company's five reporting segments:

• Beauty emerged as the strongest performer, with sales rising five percent to $4.04 billion. This was the only division to achieve volume growth, which increased by three percent.
• Health Care revenues also grew by five percent, reaching $3.41 billion.
• Grooming sales advanced two percent to $1.79 billion, despite a two percent decline in shipment volumes.
• Fabric & Home Care saw a one percent sales increase to $7.69 billion, with volumes remaining essentially unchanged.
• Baby, Feminine & Family Care was the weakest segment, with sales declining three percent to $5.12 billion on a substantial five percent volume decrease.

Steady Guidance and Dividend Announcement

Despite the quarter's challenges, Procter & Gamble's leadership maintained its full-year forecast. The company continues to project organic sales growth in a range of one to five percent and reiterated its core earnings per share guidance. The GAAP earnings per share growth outlook was narrowed to a band of one to six percent, down from the previous three to nine percent range, reflecting the higher anticipated restructuring costs.

Company executives characterized the second quarter as the expected low point for the fiscal year. They anticipate a rebound in the latter half, fueled by a slate of new product innovations. In a separate announcement, P&G declared a quarterly dividend of $1.0568 per share, payable on February 17. This marks the company's 135th consecutive dividend payment and its 69th annual increase in a row.

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