P&G forecasts muted 2027 as tighter consumer spending hurt demand

Unilever

29/07/2026 12:00

Net sales rise to $21.20 billion, miss estimates of $21.38 billion
Core operating margin drops for the third straight quarter
Q4 organic volumes flat, with declines in three of five segments
By Juveria Tabassum and Alexander Marrow
July 29 (Reuters) - Procter & Gamble PG.N 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.

MARGINS UNDER PRESSURE
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.

        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 PEP.O 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 ULVR.L 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)
 ((Juveria.Tabassum@thomsonreuters.com;))