PG earnings analysis
What we found in PG's 10-K: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
P&G delivered modest reported growth in FY2026, with sales up 3% to $87.032 billion and diluted EPS up 2% to $6.62, but underlying organic sales grew only 1% and operating margin contracted 160 basis points to 22.7%. Beauty was the strongest segment, whereas Baby, Feminine & Family Care organic sales declined 1%; more than half of company sales are international, including 21% from its five largest international markets. Cash generation improved substantially, supporting $10.232 billion of dividends and $5.028 billion of repurchases, but FY2027 will carry remaining restructuring charges and the planned $3.8 billion Thorne acquisition.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Reported sales resumed growth, but organic growth was 1%
- FY2026 net sales rose 3% to $87.032 billion, following $84.284 billion in FY2025 and $84.039 billion in FY2024. Organic sales rose 1%, with 2% favorable foreign exchange and 1% pricing offsetting flat volume and mix.
- EPS rose despite essentially flat earnings
- Diluted EPS increased 2% to $6.62 from $6.51 in FY2025 and $6.02 in FY2024. Net earnings attributable to P&G were essentially flat at $16.046 billion versus $15.974 billion, while lower weighted-average diluted shares of 2.423 billion versus 2.454 billion supported per-share growth.
- Cash conversion strengthened materially
- Adjusted free cash flow increased 8% to $15.835 billion and adjusted FCF productivity reached 100%, versus $14.606 billion and 87% in FY2025. Operating cash flow grew 10% to $19.556 billion, exceeding FY2025's $17.817 billion though remaining below FY2024's $19.846 billion.
- Leadership brands anchor superiority strategy
- P&G frames its moat around daily-use categories, superiority in product, package, communication, retail execution and value, productivity, constructive disruption and a lean organization. It reports leadership positions including over 50% global Grooming share, over 35% Fabric Care share, nearly 30% Oral Care share, and more than 30% Baby Care share.
- Beauty led growth, with mixed share performance
- Beauty was the principal growth engine: net sales rose 7% to $16.023 billion and organic sales rose 5%, led by Hair Care and Personal Care innovation. Personal Care global share increased 0.2 points, although total Beauty share fell 0.3 points and Hair Care share fell 0.5 points.
- Dividends and buybacks remained the cash priority
- Capital returns remained substantial: P&G paid $10.232 billion of dividends and repurchased $5.028 billion of stock in FY2026. The dividend rose to $4.2589 per common share from $4.0763, while total debt declined to $34.490 billion from $34.508 billion as current maturities increased and long-term debt fell.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- New $3.8 billion Thorne acquisition execution risk
- The new Thorne agreement commits P&G to acquire the premium wellness and supplements brand for $3.8 billion, with closing anticipated in FY2027 Q2 subject to regulatory approval and customary conditions. The filing states acquisitions can impair results if expected growth/cost synergies are not achieved or acquired assets subsequently fall below book value.
- Restructuring costs and execution extend into FY2027
- The focused portfolio, supply-chain and productivity plan is expected to create $1.5-$2.0 billion of before-tax restructuring costs over two years, with the remainder after FY2026 expected in FY2027 and up to 7,000 non-manufacturing roles targeted for reduction. FY2026 incurred $1.230 billion of total before-tax restructuring charges, including $903 million after tax of incremental-plan charges.
- Gillette intangible remains sensitive to macro assumptions
- The $12.8 billion Gillette indefinite-lived brand asset remains susceptible to impairment despite fair value exceeding carrying value by more than 10% in the December 2025 test. The filing quantifies that a 25-basis-point higher discount rate or 25-basis-point lower growth rate would each reduce estimated fair value by about 5%; P&G recorded a $1.3 billion pre-tax Gillette impairment in FY2024.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $6.62
- Gross margin
- 50.2%
- Operating margin
- 22.7%
- Segment
- Beauty: $16.023 billion net sales (+7%)
- Segment
- Grooming: $6.918 billion (+4%)
- Segment
- Health Care: $12.456 billion (+4%)
- Segment
- Fabric & Home Care: $30.314 billion (+2%)
- Segment
- Baby, Feminine & Family Care: $20.401 billion (+1%)
- Segment
- Corporate: $0.919 billion (+16%)
What they said about what is next.
The 10-K does not provide annual FY2027 numeric guidance; it refers to the earnings release for near-term outlook. MD&A states a long-term algorithm of organic sales growth above category/geography market rates, mid-to-high-single-digit Core EPS growth, and adjusted free-cash-flow productivity of at least 90%.
The filing reads about the same as the one before it.
What came before.
- 10-Q · April 24, 2026
- Procter & Gamble reported Q3 net sales of $21,235 million (up 7% YoY) and diluted EPS of $1.63 (up 6% YoY). Gross margin compressed 150 basis points to 49.5% and operating margin compressed 150 basis points to 21.5% as…
- 10-Q · January 23, 2026
- P&G reported net sales of $22,208 million for the quarter ended December 31, 2025, up $326 million (+1.5%) versus the prior-year quarter, while diluted EPS declined to $1.78 from $1.88 a year ago. Gross margin…
- 10-Q · October 24, 2025
- Procter & Gamble reported net sales of $22,386 million and diluted EPS of $1.95 for the three months ended September 30, 2025, beating revenue and EPS estimates. Revenue rose $649 million (3.0%) and EPS rose $0.34…
- 10-K · August 4, 2025
- P&G positions itself as a global leader in daily-use consumer brands focused on balanced top- and bottom-line growth through product superiority across five vectors (product performance, packaging, brand communication,…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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