Shares of Procter & Gamble (NYSE: PG) dipped following the release of its fiscal Q1 2025 earnings report, which revealed mixed results as the consumer goods giant fell short of revenue expectations but beat earnings per share. The company also issued a more cautious full-year outlook amid economic uncertainty, global tariff tensions, and shifting consumer behavior.
Procter & Gamble posted revenue of $19.78 billion, a 2.1% decline from the same quarter last year, falling short of analyst projections of $20.15 billion. Despite weaker sales, the company’s non-GAAP earnings per share came in at $1.54, narrowly beating estimates of $1.53. Adjusted EBITDA also significantly outperformed expectations, reaching $7.05 billion — over 30% higher than forecasted.
While organic sales rose 1%, volumes declined by 1% — a signal that consumer demand for core products such as Tide, Pampers, and Bounty may be softening. Key divisions, including baby care and household essentials, reported declining volumes. Notably, the only segment showing positive volume growth was grooming, including Gillette and Venus razors.
Tariffs and Inflation Prompt Possible Price Hikes
P&G leadership warned of potential price hikes in the coming fiscal year as a response to inflationary pressure from new tariffs. CEO Jon Moeller acknowledged that the Trump administration’s reciprocal tariffs would likely raise costs, pushing the company to consider price adjustments and alternate sourcing strategies.
“The tariffs are inherently inflationary,” Moeller stated, suggesting the company may raise prices in July when the new trade policies take effect.
Outlook Cut Amid Global Uncertainty
CFO Andre Schulten cited “a more cautious consumer” and macroeconomic unpredictability as reasons for trimming the company’s full-year guidance. The revised core EPS outlook now stands between $6.72 and $6.82, down from the previous range of $6.91 to $7.05. Revenue growth is now expected to be flat for fiscal 2025, compared to earlier forecasts of 2% to 4% growth.
Executives also mentioned that tariff-related costs could impact annual growth by $1 billion to $1.5 billion, as consumer spending slows and geopolitical tensions, particularly with China, complicate operations in international markets.
Investor Sentiment Dips
Following the earnings announcement, PG stock dropped over 4%, closing at $163.10 as investors reacted to the cautious guidance and uncertain global trade dynamics. Despite this, P&G’s strong brand portfolio and operational scale continue to offer long-term stability, though challenges in volume growth and margin pressures remain.
While Procter & Gamble managed to maintain strong margins and deliver earnings above expectations, revenue shortfalls, tariff-related cost pressures, and reduced guidance weighed heavily on investor sentiment. For those tracking PG stock, the next few quarters will be crucial in determining how well the company adapts to a slower consumer environment and rising input costs.