P&G warns on slower FY27 growth as margins fall, Q4 sales miss

(Sharecast News) - Consumer goods giant Procter & Gamble warned of slower growth in the year ahead, as uneven demand across several categories and a tough consumer backdrop weighed on its latest quarterly performance.

Procter & Gamble said FY27 net sales were expected to rise 1% to 3%, a step down from the 3.3% increase delivered in FY26 and, at the midpoint, slightly below analysts' expectations. P&G also guided for adjusted earnings per share of $6.89 to $7.11, with the midpoint coming in just under consensus forecasts.

The update followed quarterly sales that missed estimates, with the group citing a "very challenging geopolitical and economic environment" and softer demand in grooming and oral care as higher food and fuel costs, alongside persistent inflation, continued to pressure lowerincome households.

P&G reported another squeeze on profitability in the fourth quarter, with its core operating margins falling 130 basis points - a third consecutive quarterly decline - as the group stepped up marketing spend and absorbed higher commodity costs linked to the ongoing conflict in Iran. It also maintained its expectation of a roughly $1bn profit headwind in FY27 from elevated raw material, energy and transport costs, driven by surging oil prices.

Organic volumes were flat overall in Q4, with declines across three of P&G's five segments. Beauty remained a bright spot, however, as haircare and personalcare products delivered 3% volume growth even as pricing was kept broadly unchanged. Fourthquarter adjusted earnings per share came in at $1.43, narrowly ahead of the $1.41 expected by analysts, while net sales rose 1.5% to $21.2bn, but missed forecasts of $21.38bn.

As of 1325 BST, P&G shares were down 2.63% in pre-market action at $144.98 each.

Reporting by Iain Gilbert at Sharecast.com