P&G Q1 FY2027: Sales Up 4% to $23.3B, Gross Margin Down 160 bps, EPS $1.97
PG sits 20% above its 52-week low of $137.62 on elevated volume (2.4× avg).
Summary
P&G's fiscal Q1 sales rose 4% to $23.3 billion on volume and mix, but gross margin fell 160 basis points on commodity and product investment costs, leaving EPS at $1.97. The $3.9 billion Thorne acquisition closed October 1 and the $5.0 billion FY2027 buyback was reaffirmed.
Key Events · Earnings and Guidance · PG
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Q1 Sales Up 4% to $23.3B
Net sales rose to $23,276 million from $22,386 million, driven by 2.4% unit volume, 1.1% favorable geographic mix and 0.4% higher pricing; organic sales also grew 4.0%.
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Gross Margin Falls 160 bps
Gross margin dropped to 49.8% of sales, with 140 bps from higher commodity costs and 140 bps from product and packaging investments, partly offset by 120 bps of manufacturing productivity and 50 bps of lower tariff costs and recoveries.
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EPS $1.97, Core EPS $2.00
Diluted EPS rose 1% to $1.97 and Core EPS rose 1% to $2.00; net earnings attributable to P&G were $4,731 million versus $4,750 million a year ago.
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Thorne Closes for $3.9B Cash
The acquisition of Thorne, a premium wellness and supplements brand, completed October 1, 2026 for $3.9 billion all-cash and will be reported in Personal Health Care starting with the December 2026 quarter.
Analysis · PG · Industrial Applications And Services
The headline numbers were already out this morning, but the 10-Q is where the quality of the quarter shows. Sales grew 4.0% to $23.3 billion on 2.4% volume, 1.1% mix and only 0.4% price — a volume-led quarter, the healthier kind for a staples company. Margin is the problem: gross margin fell 160 basis points to 49.8%, with 140 bps from higher commodity costs and another 140 bps from product and packaging investment, partly offset by 120 bps of manufacturing productivity and 50 bps of lower tariff costs and recoveries. That flowed through to flat operating income growth of 1% and net earnings of $4.76 billion, down 1%. Cash generation was strong — $5.8 billion operating and $4.4 billion free cash flow at 93% productivity — and the balance sheet was pre-loaded for the deal, with cash up to $15.4 billion and debt due within one year up to $17.0 billion from $11.3 billion. Thorne closed October 1 for $3.9 billion all-cash, slightly above the $3.8 billion figure in the prior 10-K, and its results start in the December quarter. The buyback is running as planned: 11.5 million shares for $1.69 billion in the quarter at an average $146.47, with the $5.0 billion FY2027 target reaffirmed.
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At the time of this filing, PG was trading at $165.55 on NYSE in the Industrial Applications And Services sector, with a market capitalization of approximately $384.6B. The 52-week trading range was $137.62 to $167.25. This filing was assessed with neutral market sentiment and an importance score of 7 out of 10.