Key Takeaways:

• The beauty segment leads growth, driven by premium skincare and haircare innovation.
• North America strengthens, while Europe and Asia show mixed momentum.
• Margins pressured by tariffs and mix, but full-year guidance reaffirmed.

The Procter & Gamble Company (P&G) announced its first quarter of fiscal year 2026, delivering a 3% increase in net sales to $22.4 billion and a 2% organic sales growth, excluding foreign exchange and M&A impacts. P&G’s performance reflects thoughtful pricing, mix management, and disciplined cost control, with a particular strength in its beauty portfolio, which reported a 6% organic increase. The consumer-goods giant is off to a measured start for 2026, navigating persistent cost pressures and challenging retail environments with modest top-line growth and continued momentum.

“First quarter results reflected strong execution of our integrated strategy in a difficult geopolitical, competitive, and consumer environment,” said Jon Moeller, President and CEO of P&G on the earnings call.

Pricing Enters the Mix

This quarter is notable because P&G reported that pricing contributed to sales growth. The earnings report shows that for the quarter pricing accounted for roughly 1% of organic growth, while mix added another 1%. “Most of the pricing was innovation-driven. And in aggregate, it’s about a 2%, 2.5% price increase across the entire portfolio,” Moeller commented.

This signals a shift: After many years of relying on volume/mix and productivity gains, P&G is now more openly acknowledging the role of pricing to offset cost headwinds (tariffs, commodities) and to help maintain margins.

Beauty Segment Contributes Strong Growth

P&G’s Beauty segment led all categories this quarter, posting a 6% increase in organic sales—the highest across the company’s portfolio. Within Beauty, haircare saw low single-digit organic growth driven by volume increases and innovation-led pricing in North America and Europe, and skincare rose mid-single digits thanks to premium product mix and higher pricing in North America (despite volume declines). “In some channels, we saw the majority of growth in our categories in the premium end, not in the value end of the lineup,” explained CFO Andre Schulten on the earnings call.

In other segments:

• Grooming saw +3% organic growth, driven by innovation pricing in North America/Europe and volume growth (offset by product-mix headwinds). 
• Healthcare had a 1% organic growth, oral care was flat, and personal healthcare saw low single digits. 
• Baby, Feminine, and Family Care has organic sales unchanged, as babycare increased low single digits, feminine care was flat, and family care was down low single digits.

“Our organic sales growth, earnings, and cash results in the first quarter reflect strong execution of our integrated strategy,” said Moeller in a company press release. “These results keep us on track to deliver within our guidance ranges on all key financial metrics for the fiscal year in a challenging consumer and geopolitical environment.”

By Region

• North Americawas up mid-single digits, led by Beauty and Fabric & Homecare 
• Europe was flat with pricing gains offset by volume declines 
• Greater China showed low single-digit growth, driven by Premium Beauty 
• Latin America had single-digit organic growth, driven by healthcare pricing 
• Asia Pacific (excluding China) came in flat to slightly positive organic sales 
• India, Middle East, and Africa had low single-digit organic growth

Key Financials at a Glance

• Net sales were $22.4 billion, up 3% vs. the prior year
• Organic sales were up 2% year over year (YoY)
• Diluted EPS came in at $1.95, up 21% YoY, reflecting a high level of restructuring charges in the prior year period 
• Core EPS (non-GAAP) came in at $1.99, up 3%
• Operating cash flow marked at $5.4 billion, alongside net earnings of $4.8 billion 
• Adjusted free-cash flow productivity noted at 102% 
• $3.8 billion was returned to shareholders through $2.55 billion in dividends and $1.25 billion in share repurchases

“We remain committed to our integrated growth strategy of a focused product portfolio of daily use categories where performance drives brand choice, superiority, across product performance, packaging, brand communication, retail execution and consumer and customer value, productivity, constructive disruption, and an agile and accountable organization,” Moeller added. “We are increasing investment in innovation and demand creation to improve value for consumers and drive category growth.”

Leadership Transition and Restructuring Backdrop

This quarter also takes on additional strategic importance because it is the last under Moeller’s tenure as CEO. In July 2025, P&G announced that Shailesh Jejurikar, currently COO, will succeed Moeller as President and Chief Executive Officer, effective January 1, 2026, with Moeller moving into the role of Executive Chairman. The company framed the change as a planned succession, enabling continuity of its strategy.

Additionally, over the summer P&G announced a major restructuring initiative: The company will cut approximately 7,000 jobs (roughly 6% of its global workforce or 15% of nonmanufacturing roles) over the next two years. This initiative signals sharper focus on productivity, organizational agility, and cost reduction amid a more challenging macro environment.

Guidance Maintained, but Headwinds Loom

P&G reaffirmed its full-fiscal-year 2026 guidance: all-in sales growth of +1 % to +5%, organic sales growth in-line to +4%. The bottom line delivers a solid quarter for P&G in line with modest expectations, a strong cash-flow performance, and resilient beauty-segment momentum. That said, margin pressures from mix, tariffs, and commodities persist, and the company’s maintained (but conservative) guidance reflects the continuity cautiousness in the consumer environment. P&G’s results reinforce that premium positioning, innovation investment, and strong retail execution are increasingly key levers in a slow growth market.