Procter & Gamble (P&G) reported better-than-expected profits on Friday, April 24, for the third quarter of its staggered fiscal year. The performance was driven by broad-based sales growth, while a gain from an asset sale helped offset cost pressures from surging oil prices linked to the Iran conflict, as well as the lingering impact of Trump-era tariffs.

“We’re increasing investments to accelerate momentum with consumers despite the challenging geopolitical and economic environment, while still maintaining our guidance ranges for the fiscal year,” said P&G President and Chief Executive Officer, Shailesh Jejurikar.

Higher crude prices will result in a USD 150 million headwind in the current fiscal year for the maker of Tide detergent, Bounty paper towel and other staples, P&G said in its earnings press release.

The group confirmed its annual forecast, but said it expects earnings per share "to be toward the lower end of the guidance range."

Profits for the quarter ending March 31 were USD 3.9 billion, up four percent from the year-ago period. Revenues rose seven percent to USD 21.2 billion. All five product divisions scored sales growth, led by beauty, with 11 percent.

The rise in net profit was driven primarily by a USD 261 million after-tax gain from the January sale of its USD 476 million stake in Glad, a joint venture with disinfectant giant Clorox, which was subsequently dissolved.

Chief Financial Officer Andre Schulten said the results showed the strength of P&G’s business continuity operations, "despite some force majeure declarations by our direct suppliers or by their upstream suppliers."

Supply chain disruptions

Supply disruptions due to the Iran war, including the near-total shutdown of the Strait of Hormuz, have forced P&G to seek alternative sources of feedstocks, often resulting in higher shipping costs and sometimes product reformulations.

"We see some suppliers just not being able to supply at all," Schulten said on a conference call with analysts. "We see some manufacturing facilities that have been compromised by the war," he said. "And so it’s not just the oil price, it’s also the availability of product and input costs."

P&G is also concerned about the impact of inflation — across food, energy, healthcare, and more — on consumer spending, particularly as people increasingly prioritize value for money.

Schulten said the company was refraining so far from forecasting profits for fiscal year 2027, which begins July 1.

If Brent crude prices were to stay about USD 100 a barrel for the year, it would add USD 1.3 billion before tax or USD 1 billion after tax versus oil prices in the mid-60s, he said.

P&G is also eyeing a potential tariff refund after the Supreme Court nullified some of President Donald Trump’s levies.

The company has about USD 150 million in tariff potential refunds, but "how much of that is recoverable, we’ll find out," Schulten said on the call.