Procter & Gamble beats on quarterly earnings, raises sales outlook on Thorne deal

Procter & Gamble reported first-quarter earnings per share of $2.00, $0.06 above estimates. Revenue was $23.28 billion, below the $23.48 billion forecast.

Chairman, President and CEO Shailesh Jejurikar said the quarter's sales, earnings and cash results reflect sharper execution of the company's strategy and keep it on track to meet full-year guidance despite expected geopolitical and economic challenges.

The company raised its fiscal 2027 guidance for all-in net sales growth to a range of 2% to 4%, up from its prior forecast, citing the acquisition of Thorne. It left its organic sales growth guidance at 1% to 3% and its core earnings per share growth guidance at in-line to 3%, which works out to $6.89 to $7.11 per share, with a midpoint of $7.00. Diluted EPS growth guidance stayed at 1% to 5% against fiscal 2026 diluted EPS of $6.62.

P&G said it now expects a $1.4 billion after-tax commodity cost headwind for fiscal 2027, plus $300 million from higher interest expense, $150 million from lower non-operating income and $50 million from unfavorable foreign exchange. Together those add up to a $0.79 per share drag on core EPS growth. The company also expects a core effective tax rate of 20% to 21%, capital spending of 4.5% to 5.5% of net sales, and free cash flow productivity of 85% to 90%. It plans to pay more than $10 billion in dividends and buy back about $5 billion of shares in fiscal 2027.

The higher sales growth range comes from the Thorne acquisition rather than faster growth in the existing business, since organic sales growth and core EPS growth guidance are unchanged. That unchanged core EPS range still has to absorb the $0.79 per share drag from commodities, interest expense, non-operating income and currency, so it depends on those pressures not getting worse. What comes next is how much Thorne adds to sales once the deal closes, and whether organic growth stays within its range.