Shares of Procter & Gamble (P&G) popped on Thursday, October 22, after the group reported broad-based sales growth despite worsening inflation pressures buffeting consumers of the company’s household goods.
P&G, whose brands include Tide detergent, Bounty paper towels, Gillette razors, Pampers diapers, Pantene and Head & Shoulders shampoos, Oral-B toothpastes and SK-II care, scored sales increases of between around three and six percent across its businesses, while also achieving volume growth in three of the five divisions.
Profits in P&G’s first quarter of fiscal year 2027 were flat at US$4.7 billion, while revenues rose four percent to US$23.3 billion.
Chief Financial Officer Andre Schulten called the results a "great start" to the year, but added that "the consumer is the key variable here."
P&G modestly lifted its full-year sales forecast to two-to-four percent growth, up a point from the earlier forecast following the acquisition of health supplement company Thorne.
But P&G also now sees a US$1.4 billion hit in 2027 from higher costs for raw materials, energy and transport, up from the prior US$1 billion forecast.
Schulten said consumers have been resilient, but constitute an unknown variable in the coming period.
"We’re looking at fuel prices, gas prices around the world that are creating turmoil," he said. "You look at France, you look at the conversation in the US. So there’s clearly pressure on the consumer in the short term."
P&G’s outlook splits the difference between a "bull" case that sees greater growth and a "bear" case that predicts greater fallout on sales.
"So far, the consumer has held up," Schulten said. "We don’t know if that’s going to continue."
