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(Sharecast News) - Shares in Procter & Gamble were on the rise in pre-market trading on Friday after the American consumer products giant reported a solid increase in first-quarter revenues and halved its projection for tariff costs this year.
The company said it now expects higher costs from trade tariffs of around $400m after tax for the fiscal year ending 30 June 2026, down from earlier guidance of $800m.
Net sales were up 3% over last year during the three months to 30 September at $22.39bn, ahead of the $22.18bn expected by Wall Street. Organic sales were up 2%, helped by higher pricing and a more favourable product mix.
Beauty sales were up 6% on an organic basis, while grooming sales rose 3% and healthcare sales were up 1%. That was enough to offset flat performances in the fabrice/homecare business and baby, feminine and family care unit.
Increased tariff and commodity costs had a combined 70-basis point negative impact on margins over the first quarter, pushing the core gross margin down 50bp. However, core selling, general and administrative expenses as a percentage of sales also fell 40bp compared with a year ago, helped by productivity savings.
As such, net profits were up 20% at $4.75bn, while adjusted earnings per share rose 3% to $1.99, beating the $1.90 consensus forecast.
"Our organic sales growth, earnings and cash results in the first quarter reflect strong execution of our integrated strategy," said chair, president and chief executive Jon Moeller.
"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."
The company maintained its full-year guidance for sales growth of between 1-5% this fiscal year, with FX, acquisitions and divestitures expected to have a one-percentage point impact on the top line. Diluted net earnings per share are still forecast to grow by 3-9% from last year's $6.51.
By 0907 in New York, the stock was trading 2.5% higher at $156.02 ahead of the opening bell.
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