Procter & Gamble reported fiscal first-quarter 2027 results on Thursday, October 22, before the open, for the period ended September 30, 2026.
Organic growth: 4.0% - the highest in five quarters. And core earnings per share: just 1%, and on a currency-neutral basis zero. That is the report.
There may be errors or inaccuracies. Found something that looks wrong? Write to me and I will fix it.
‼ A note on what is not in this report. The release the company filed with the SEC is an earnings presentation, and it reports sales as growth rates only - not in dollars. So there is no absolute sales figure in this article: it does not appear in the source, and I am not deriving one by estimate. The absolute figures that do appear - net earnings, cash flows and capital spending - are given as stated.
What was reported
| Fiscal Q1 2027 | |
|---|---|
| Reported net sales growth | +4.0% |
| Foreign exchange impact | 0.0% |
| Acquisition and divestiture impact | 0.0% |
| Organic sales growth | +4.0% |
| of which: volume | +2.4% |
| of which: mix | +1.1% |
| of which: pricing | +0.4% |
| GAAP diluted earnings per share (dollars) | 1.97 (against 1.95) |
| Core earnings per share (dollars) | 2.00 (against 1.99) - +1% |
| Currency-neutral core earnings per share (dollars) | 1.99 - 0% |
| Net earnings (millions of dollars) | 4,757 |
| Operating cash flow (millions of dollars) | 5,767 |
| Capital spending (millions of dollars) | (1,366) |
| Free cash flow (millions of dollars) | 4,401 |
| Free cash flow productivity | 93% |
Source: Procter & Gamble's fiscal first-quarter 2027 earnings presentation, October 22, 2026, filed with the SEC on Form 8-K as Exhibit 99.1. Organic sales growth, core earnings per share, currency-neutral core earnings per share and free cash flow are non-GAAP measures, as the company defines them.
The acceleration is real, and worth seeing in context
Organic sales growth over the last five quarters, per the company:
| Quarter | Organic growth |
|---|---|
| Q1 FY'26 | 1.6% |
| Q2 FY'26 | 0.0% |
| Q3 FY'26 | 3.5% |
| Q4 FY'26 | 0.5% |
| Q1 FY'27 | 4.0% |
So not only is this quarter the highest of the five - it comes after a quarter of 0.5%. That is considerable volatility at a company that is supposed to be among the steadiest in the world.
And what makes the 4.0% higher quality is its composition: 2.4% of it is volume, 1.1% mix, and only 0.4% pricing. A consumer products company growing mainly on volume is selling more units - not simply charging more. In years when growth in this sector was almost entirely pricing, that is a difference worth noting.
The company also reports that all ten product categories and all six regions grew organic sales, that 29 of its top 50 category/country combinations held or grew share fiscal year to date, and that global aggregate value share was in line with the prior year.
‼ And then the earnings line, which holds still
Core earnings per share rose 1% to $2.00. On a currency-neutral basis - 0%, $1.99.
The reason is not in the revenue line but in margin:
- Core gross margin: down 150 basis points
- Core operating margin: down 80 basis points (and ex-currency, 90 basis points)
- Total productivity savings: a contribution of 250 basis points
So the company delivered 250 basis points of savings, and operating margins still fell 80. The savings covered part of the pressure, not all of it.
The segments, where there are two opposite shapes
| Segment | Net sales growth | Organic growth | Organic volume | Net earnings |
|---|---|---|---|---|
| Beauty | +6.4% | +5.4% | +2.2% | -1% |
| Grooming | +4.0% | +4.5% | -0.4% | +3% |
| Health Care | +3.1% | +2.7% | -2.9% | +9% |
| Fabric & Home Care | +4.2% | +4.8% | +4.3% | +3% |
| Baby, Feminine & Family Care | +2.9% | +3.0% | +2.3% | -4% |
| Total company | +4.0% | +4.0% | +2.4% |
The two lines worth stopping on are the opposite of each other:
Beauty grew fastest - 5.4% organic - and its net earnings fell 1%. According to the company, sales growth and productivity savings were more than offset by marketing investments, increased commodity costs and product mix. Global Hair Care value share was in line with the prior year, Global Personal Care share decreased 0.4 points and Global Skin Care share decreased 0.6 points.
And Health Care is the perfect inverse: volume fell 2.9%, and net earnings rose 9%. Organic growth there, 2.7%, came entirely from pricing (+2.8%) and mix (+2.8%) - that is, fewer units at a higher price. Global Personal Health Care share rose 0.5 points, and Global Oral Care share fell 0.6 points.
The outlook, maintained - and what sits inside it
The company maintained every element of its 2027 guidance:
| FY2027 guidance | |
|---|---|
| Net sales growth | +2% to +4% |
| Organic sales growth | +1% to +3% |
| Core earnings per share growth | 0% to +3% (off a $6.89 base) |
| All-in earnings per share growth | +1% to +5% (off a $6.62 base) |
| Core effective tax rate | 20% to 21% |
| Free cash flow productivity | 85% to 90% |
| Capital spending as a percentage of sales | 4.5% to 5.5% |
| Dividends | more than $10 billion |
And what sits beneath that guidance is the figure I take from the whole report. The company sets out the headwinds it is embedding for the year:
- $1.4 billion after tax from higher energy, transportation and raw material costs
- $300 million after tax from higher net interest expense
- $150 million after tax from lower non-operating income
- $50 million after tax from a foreign exchange headwind
And the company writes explicitly in the presentation that it expects cost headwinds to increase in the next few quarters.
For context, two items the company excludes from core earnings: the portfolio and productivity plan announced in June 2025, under which it expects to incur roughly $2 billion before tax over two years - more than half incurred in 2026 and the remainder in 2027; and the Glad joint venture agreement, which expired in January 2026, under which Clorox purchased the company's minority interest for $476 million, with an after-tax gain of $261 million.
The stock
The report was published before the open. So the trading reaction is that same day, October 22.
The stock jumped 5.58% to $165.59 from $156.84. It opened at $162.14 - a positive gap of 3.38% - and rose as high as $166.85. The session low, $161.36, also stayed above the pre-report close, meaning the stock did not trade below it at any point. Volume: 22.0 million shares, more than double the day before.
On Friday the stock fell 2.76%, to $161.02 - giving back about half the gain.
הזווית שלי
דעה אישית של אילן אברמוב - לא ייעוץ ולא המלצה
This report poses a question I think is more interesting than the figures themselves: which matters more at a company like this - that it has returned to growth, or that it cannot convert the growth into profit?
The first side is real and not trivial. 4.0% organic after a quarter of 0.5% is an acceleration, and more importantly - 2.4% of it is volume. A company this size selling more units in ten of ten categories and six of six regions is not a company holding up revenue through price increases. That is the higher-quality kind of growth, and it arrived.
The second side is that it did not reach the bottom line. Core earnings per share up 1%, and zero ex-currency, against gross margins eroding 150 basis points - this is a company whose growth is being absorbed by costs. And 250 basis points of productivity savings that were not enough to prevent an 80 basis point erosion in operating margin tell you the size of the pressure.
And what concerns me more than the quarter is what the company says about the next ones: it is embedding $1.4 billion after tax of energy, transportation and raw material costs, and writes that it expects that pressure to increase. Guidance maintained unchanged while the company itself warns of rising costs is guidance that depends on productivity succeeding more than on sales succeeding.
And the segment that is, to my mind, the most precise sign of all this is Health Care: volume down 2.9%, growth entirely from pricing and mix, and net earnings up 9%. It works - now. But it is also exactly the place where one asks how long you can sell fewer units for more money before share moves, and Oral Care share there did fall 0.6 points.
What I will follow: core gross margin, which is the line where the question of whether the 4.0% reaches the bottom line will be settled; and Health Care volume, because if it keeps falling while profit rises, that is a shape worth following.
(To be clear: this is my personal opinion only. Nothing here is a recommendation to take any action, and there is no forecast here of the price of any security.)
Ilan Abramov, the author, or anyone on his behalf may hold some of the securities or funds mentioned in this article.
