P&G reports 2% growth in net sales for the second fiscal quarter of 2025
Diluted earnings per share rise 34%, driven by accounting factors, while organic sales increase by 3% during the period
Procter & Gamble (P&G) reported net sales of US$21.9 billion for the second quarter of fiscal year 2025, representing a 2% increase compared to the same period last year. Organic sales, which exclude the impacts of currency exchange, acquisitions, and divestitures, grew by 3%.
Diluted earnings per share (EPS) reached US$1.88, a significant 34% increase, primarily driven by the accounting write-down of a Gillette intangible asset in the prior year. Core EPS also stood at US$1.88, reflecting a 2% increase.
Operating cash flow totaled US$4.8 billion, while net income for the quarter was US$4.7 billion. The company highlighted a free cash flow productivity of 84%, calculated as operating cash flow minus capital expenditures relative to net income. During the quarter, P&G returned over US$4.9 billion to shareholders, including US$2.4 billion in dividends and US$2.5 billion in share repurchases.
PERFORMANCE BY SEGMENT AND ORGANIC GROWTH
Jon Moeller, P&G’s chairman, CEO, and president, emphasized the strong quarterly results. “Our first-half results keep us on track to deliver within our guidance ranges on all key financial metrics for the fiscal year. We remain committed to our integrated growth strategy of a focused product portfolio of daily use categories where performance drives brand choice, superiority — across product performance, packaging, brand communication, retail execution and consumer and customer value — productivity, constructive disruption and an agile and accountable organization. This strategy has enabled our solid results and is a foundation for balanced growth and value creation,” he stated.
For the quarter, organic sales growth of 3% was driven by a 2% increase in organic volume and a 1% positive impact from favorable geographic mix. Pricing impact was neutral during the period.
Among segments, the highlights include:
- Beauty: 2% growth, with gains in hair and personal care, despite a decline in skin care;
- Grooming: 2% growth, driven by innovation;
- Health Care: 3% growth, led by oral and personal care;
- Fabric & Home Care: 3% growth, driven by favorable geographic mix and increased home product volumes;
- Baby, Feminine & Family Care: 4% growth, boosted by higher family care volumes and favorable mix in key markets.
FISCAL YEAR 2025 PROJECTIONS
P&G maintained its guidance for total sales growth between 2% and 4%, with organic sales expected to grow between 3% and 5%. Diluted EPS is projected to increase by 10% to 12%, reaching a range of US$6.91 to US$7.05.
Despite its positive outlook, the company highlighted challenges, including a US$200 million negative impact from commodity costs and a $300 million impact from unfavorable exchange rates. Additionally, lower tax benefits and reduced divestitures compared to the prior year are expected to pressure core EPS by US$0.10 to US$0.12.
P&G also anticipates an effective tax rate between 20% and 21%, with capital expenditures representing 4% to 5% of net sales. Free cash flow productivity is estimated at 90%, with planned dividend payments of around US$10 billion and share repurchases between US$6 billion and US$7 billion.
The company reiterated that forward-looking statements are subject to risks, including currency volatility, global economic challenges, and commodity costs. P&G stated it would update its projections only when required by law.
