Procter & Gamble (P&G) reported its third-quarter fiscal 2025 results, navigating a complex consumer and geopolitical environment with modest growth and a continued focus on long-term brand strength and shareholder returns.

For the quarter ending March 2025, the consumer product conglomerate posted net sales of $19.8 billion, a 2% decrease year over year (YoY). Despite this dip, organic sales (which exclude the impact of foreign exchange, acquisitions, and divestitures) grew by 1%, driven predominantly by higher pricing strategies. Diluted and core earnings per share (EPS) both increased by 1% to $1.54 billion, in line with expectations.

Operating cash flow for the quarter totaled $3.7 billion, with an adjusted free cash flow productivity rate of 75%. P&G returned $3.8 billion to shareholders through $2.4 billion in dividends and $1.4 billion in share repurchases. The company also marked its 69th consecutive annual dividend increase, exemplifying the company’s long-standing commitment to returning value to investors.

Category Performance Highlights

Across P&G’s core categories, Beauty and Personal Care produced mixed results.

• Beauty: Organic sales rose by 2%, as strong personal care growth offset weaker performance in skincare and flat haircare results. 
• Grooming: Organic sales grew by 3%, supported by volume gains and pricing actions in key markets such as North America, Europe, and Latin America. 
• Healthcare: Organic sales increased by 4%, led by strength in personal healthcare and premium oral care innovations. 
• Baby, Feminine, and Family Care: Organic sales declined by 1%, reflecting volume softness that was partially offset by a favorable geographic and product mix. Feminine Care organic sales remained unchanged, as a favorable geographic mix was offset by volume declines. Family Care organic sales decreased to low single digits driven by volume declines, unfavorable product mix, and merchandising investments.

Despite a slight decrease in gross margins (down 20 basis points on a reported basis), P&G expanded its operating margins by 90 basis points, benefiting from significant productivity savings and disciplined cost management.

Updated 2025 Guidance

P&G stated that its performance is being impacted by ongoing broader economic uncertainties, including the expected effects of the US tariffs. The company faces a potential $400 million after-tax headwind (equivalent to $0.16 per share) from these commodity costs and foreign exchange pressures. P&G is also anticipating modest headwinds from net interest income/expense and reduced gains from minor brand divestitures compared to last year. 

Capital expenditures are projected to be in the 4%–5% range of net sales, with a continued commitment to strong shareholder returns, including approximately $10 billion in dividends and $6–$7 billion in share repurchases expected for the fiscal year.

As a result, P&G adjusted its fiscal 2025 guidance to reflect current market dynamics. The company now expects:

• All-in sales to be approximately flat compared to fiscal 2024
• Organic sales growth of around 2%
• Diluted EPS growth between 6% and 8% compared to fiscal 2024’s $6.02
• Core EPS to land between $6.72 and $6.82, representing 2% to 4% growth from the prior year

“We delivered modest organic sales and EPS growth this quarter in a challenging and volatile consumer and geopolitical environment,” said Jon Moeller, Chairman of the Board, President, and Chief Executive Officer, in a company press release. “We’re making appropriate adjustments to our near-term outlook to reflect underlying market conditions while remaining confident in the longer-term growth prospects for our brands and the markets where we compete.

Moeller emphasized that P&G remains committed to an integrated growth strategy where performance drives brand choice, supervisory productivity, constructive disruption, and an agile and accountable organization. “We’re maintaining investments in superior innovation across price tiers to improve value for consumers and drive category growth,” he said.

Despite looming pressures from tariffs, foreign exchange, and evolving consumer behaviors, P&G remains focused on driving long-term growth. By adjusting its fiscal 2025 while doubling down on brand superiority and agility, the company aims to navigate the current complexities by positioning itself for continued leadership across core categories.