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# P&G Grows Organic Sales 4.0% In First Quarter, Its Fastest In Five Quarters, But Warns Costs Will Rise
- URL: https://www.bullished.co/p-and-g-grows-organic-sales-4-0-in-first-quarter-its-fastest-in-five-quarters-but-warns-80b26037/
- Published: 2026-10-22T14:35:57.000Z
- Updated: 2026-10-28T18:11:02.000Z
- Description: Core margins fell as the consumer goods maker said cost pressure will build over the next few quarters, with organic sales and EPS guidance maintained.
- Author: Matteo Parrino
- Tags: Earnings, PG, Industry: Consumer Staples

[Procter & Gamble](https://www.bullished.co/tag/pg/)'s organic sales [rose 4.0%](https://www.sec.gov/Archives/edgar/data/0000080424/000008042426000252/slides.htm?ref=bullished.co) in the first quarter of fiscal 2027, but management told investors to expect cost headwinds to increase over the next few quarters, according to slides furnished in an [8-K filed](https://www.sec.gov/Archives/edgar/data/0000080424/000008042426000252/pg-20261022.htm?ref=bullished.co) Thursday.

## Volume leads the sales gain

The [4.0% organic gain](https://markets.ft.com/data/announce/detail?dockey=600-202610220700BIZWIRE%5FUSPRX%5F%5F%5F%5F20261022%5FBW817063-1&ref=bullished.co), which strips out acquisitions, divestitures and currency, compares with 1.6% a year earlier and 0.5% in the fourth quarter of fiscal 2026\. Volume added 2.4 points, mix 1.1 and pricing 0.4.

All 10 product categories and all 6 regions grew organic sales. Of the top 50 category and country combinations, 29 held or grew value share fiscal year to date, and global aggregate value share matched the prior year.

By segment, organic sales rose 5.4% in Beauty, 4.5% in Grooming, 4.8% in Fabric & Home Care, 3.0% in Baby, Feminine & Family Care and 2.7% in Health Care. Net earnings fell 1% in Beauty and 4% in Baby, Feminine & Family Care, and rose 3% in Grooming, 9% in Health Care and 3% in Fabric & Home Care.

## Margins give back 150 points

Core earnings per share were [$2.00, up 1%](https://markets.ft.com/data/announce/detail?dockey=600-202610220700BIZWIRE%5FUSPRX%5F%5F%5F%5F20261022%5FBW817063-1&ref=bullished.co), and $1.99 on a currency-neutral basis, flat with a year earlier. Core gross margin fell 150 basis points (1.5 percentage points) to 50.0%, and core operating margin fell 80 basis points to 25.9%. Productivity savings contributed 250 basis points.

Free cash flow was $4.401 billion, from $5.767 billion of operating cash flow less $1.366 billion of capital spending. Against $4.757 billion of net earnings, that is 93% free cash flow productivity.

In Thursday trading as of 10:31 a.m. ET, PG shares were up 5.48% at $165.44.

## Cost warning, guidance mostly unchanged

P&G, which sells daily-use branded products such as beauty, grooming, health, fabric, home and baby care goods in about 180 countries and territories, said the topline is accelerating despite a challenging macro environment, and that volatility remains.

It maintained fiscal 2027 guidance for organic sales growth of 1% to 3% and core EPS growth of 0% to 3%, with all-in EPS growth of 1% to 5%. Net sales growth guidance was updated to 2% to 4%.

The core EPS outlook carries a $1.4 billion after-tax hit from higher energy, transportation and raw material costs, a $50 million foreign exchange headwind, $300 million of higher net interest expense and $150 million of lower non-operating income.

The outlook excludes significant commodity cost increases, tariff changes, currency weakness and supply chain disruption, which P&G listed as potential headwinds not included in guidance.

Learn

- [Item 7.01: Regulation FD disclosure →](https://www.bullished.co/learn/8-k-items-explained/#item-701-regulation-fd-disclosure)  
From 8-K Items Explained: What Every Item Code From 1.01 To 9.01 Tells You, With Examples

### Sources

- [8-K Filing — PROCTER & GAMBLE Co (PG)](https://www.sec.gov/Archives/edgar/data/0000080424/000008042426000252/pg-20261022.htm?ref=bullished.co) — SEC EDGAR
- [Exhibit slides.htm — PROCTER & GAMBLE Co 8-K exhibit](https://www.sec.gov/Archives/edgar/data/0000080424/000008042426000252/slides.htm?ref=bullished.co) — SEC EDGAR
- [P&G Announces Fiscal Year 2027 First Quarter Results – Company Announcement - FT.com](https://markets.ft.com/data/announce/detail?dockey=600-202610220700BIZWIRE%5FUSPRX%5F%5F%5F%5F20261022%5FBW817063-1&ref=bullished.co) — Financial Times
- [P&G Q1 earnings on deck: Eyes on sales growth (PG:NYSE) | Seeking Alpha](https://seekingalpha.com/news/4655172-pg-q1-earnings-on-deck-eyes-on-sales-growth?ref=bullished.co) — seekingalpha.com

### More on Procter & Gamble

- [P&G Paid $3.9 Billion Cash For Thorne With Short-Term Debt Up To $17 Billion](https://www.bullished.co/p-and-g-paid-3-9-billion-cash-for-thorne-with-short-term-debt-up-to-17-billion-10b155d4/)
- [P&G CFO: 'No Way To Recover This Level Of Commodity Pressure Without Pricing'](https://www.bullished.co/p-and-g-cfo-no-way-to-recover-this-level-of-commodity-pressure-without-pricing-d0797d4c/)
- [P&G Sales Rise 4% To $23.3 Billion, But Commodity Costs Cut Core Gross Margin 150 Basis Points](https://www.bullished.co/p-and-g-sales-rise-4-to-23-3-billion-but-commodity-costs-cut-core-gross-margin-150-basis-ee6cdae3/)

[All Procter & Gamble (PG) coverage →](https://www.bullished.co/tag/pg/)