P&G forecasts muted 2027 as tighter consumer spending hurt demand
P&G forecasts muted 2027 as tighter consumer spending hurt demand
By Juveria Tabassum and Alexander Marrow Wed, July 29, 2026 at 11:05 AM UTC
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By Juveria Tabassum and Alexander Marrow
July 29 (Reuters) - Procter & Gamble forecast slower revenue and profit growth in fiscal 2027 on Wednesday after quarterly sales missed estimates due to uneven demand in categories such as grooming and oral care from a "very challenging geopolitical and economic environment".
Higher food and gas prices and several quarters of sticky inflation have forced lower-income consumers to tighten spending and seek cheaper alternatives for some pantry staples.
The Tide maker expects fiscal 2027 total net sales to grow in the range of 1% to 3%, compared with 3.3% growth in 2026. At the mid-point, the forecast was slightly below analysts' average estimate of 2.7% growth.
The company expects fiscal 2027 adjusted earnings per share between $6.89 and $7.11, with a midpoint slightly below estimates of $7.04, according to data compiled by LSEG.
"Fiscal 2026 was a year of foundation building," said P&G CEO Shailesh Jejurikar, who took charge of the consumer goods bellwether in January.
P&G's core operating margin dropped 130 basis points, its third straight quarter of decline as the company ramps up investment in marketing and deals with higher commodity costs as a fallout of the U.S. war in Iran.
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The company stuck to its expectation of a roughly $1 billion profit impact in fiscal 2027 from higher raw material, energy and transportation costs due to surging oil prices.
A P&G spokesperson said there was some uncertainty around how long the costs would remain high and how prices would fluctuate.
Consumer-facing companies such as PepsiCo have flagged higher input costs in the back half of the year.
P&G's overall fourth-quarter organic volumes were flat, falling in three of its five reported segments. Its pricier hair care and personal care products were once again a bright spot, with volumes rising 3% in the beauty category even as it kept prices broadly unchanged in the fourth quarter.
In contrast, rival Unilever posted its best quarter by volumes in over a decade as it shifts focus to beauty and wellness products.
The category has bucked broader spending weakness with consumers continuing to buy nice-to-have self-care items and giving companies the room to raise prices for newer launches for products such as shampoos and skin care products.
Procter & Gamble's fourth-quarter adjusted earnings per share of $1.43 narrowly beat estimates of $1.41. Its net sales rose 1.5% to $21.20 billion but missed expectations of $21.38 billion.
(Reporting by Juveria Tabassum in Bengaluru and Alexander Marrow in London; Editing by Arun Koyyur)
Source: “AOL Money”
