Procter & Gamble (PG) reported its fiscal third quarter 2026 earnings, surpassing analyst expectations on all key metrics and marking a significant turnaround with the first company-wide volume growth in a year. The stock rose approximately 3-4% in premarket trading following the announcement.
Earnings Highlights: The company posted adjusted earnings per share of $1.59, beating the consensus estimate of $1.56. Revenue came in at $21.24 billion, a 7% year-over-year increase and well above the $20.5 billion expected by Wall Street. Net income attributable to P&G was $3.93 billion, or $1.63 per share, up from $3.78 billion, or $1.54 per share, in the same quarter last year.
Volume Growth Returns: A key highlight was a 2% increase in overall volume, the first positive volume reading in a year. This is considered a more accurate indicator of demand than sales, as it strips out pricing effects and provides a cleaner picture of consumer appetite. CFO Andre Schulten described the U.S. consumer as 'stable,' while noting that bifurcation between consumer segments continues.
Segment Performance: The beauty division, housing brands like Olay, Head & Shoulders, and Pantene, was the standout with 5% volume growth. The baby, feminine, and family care segment (including diapers, Bounty, and Charmin) saw 3% volume growth. Fabric and home care (Tide) grew 2%. However, the grooming segment (Gillette, Venus) and health care segment (Oral-B, Vicks) each saw a 2% volume decline.
Margins and Outlook: Operating margin fell to 21.5% from 23.3% a year ago, and gross margin also missed analyst expectations. P&G reiterated its full-year outlook, projecting sales growth of 1-5% and net EPS growth of 1-6% (adjusted EPS midpoint of $6.96). CEO Shailesh Jejurikar stated the company is increasing investments to build consumer momentum despite a challenging environment. P&G also flagged a $150 million cost increase in Q4, driven largely by higher transportation costs due to rising fuel prices.
Free cash flow margin held steady at 14.3%, in line with last year. The stock traded up approximately 2.6% to $149.47 shortly after the report before extending gains.
