Procter & Gamble (PG) Stock: Consumer Giant Misses Revenue Target as Shoppers Pull Back

TLDR

• Procter & Gamble missed Q2 revenue estimates with $22.21 billion in sales versus expected $22.28 billion, held back by weak U.S. consumer spending
• Sales volumes fell 1% overall as three of five product categories saw declining demand, with baby and family care down 5%
• Adjusted earnings per share of $1.88 beat analyst estimates of $1.86 despite the revenue shortfall
• Beauty products bucked the trend with 3% volume growth driven by hair care and personal care brands like Pantene and Olay
• The company lowered its fiscal 2026 net earnings per share growth forecast to 1-6% from 3-9% due to higher restructuring charges

Procter & Gamble reported mixed second-quarter results on Thursday. The company fell short of Wall Street’s revenue expectations while beating earnings forecasts.

The Procter & Gamble Company, PG

Net sales rose just 1% to $22.21 billion for the three months ended December 31. Analysts had expected $22.28 billion. The miss came as American consumers cut back on everyday essentials like laundry detergent and toilet paper.

Adjusted earnings per share hit $1.88, topping the $1.86 estimate. Net income dropped to $4.32 billion from $4.63 billion in the same period last year.

Sales volumes fell 1% during the quarter. That’s well below the typical 3-4% growth rate P&G usually sees in the U.S. market. Three of the company’s five product categories reported shrinking demand.

Lower-income households have been pulling back on spending. They’re dealing with high prices and uncertainty about jobs. A government shutdown in October and November made things worse by delaying food assistance payments.

“Consumers are in periods of less certainty, sometimes skimping a little bit on consumption,” CFO Andre Schulten told reporters. He noted that consumers haven’t stopped buying necessities entirely. They’re just buying at a slower pace.

Diapers and Paper Products Take Biggest Hit

The baby, feminine and family care segment saw the steepest decline. Volumes dropped 5% in this category. Family care products like Bounty paper towels and Charmin toilet paper fell the most.

P&G faced tough comparisons from last year when retailers and shoppers stocked up ahead of expected port strikes. The grooming business, which includes Gillette and Venus razors, reported a 2% volume drop. Healthcare products saw a 1% decline.

Fabric and home care products, including Tide and Febreze, stayed flat compared to last year. The company raised prices about 1% across categories during the quarter to offset tariff costs.

Beauty Business Shines While Others Struggle

Beauty products were the bright spot. This segment saw volumes jump 3%, driven by hair care and personal care items. The category includes brands like Pantene and Olay.

Consumers keep buying self-care products even as they cut back elsewhere. Higher prices and product innovation in hair and personal care helped boost sales. Beauty makes up about 18% of P&G’s total revenue.

The company maintained its annual sales forecast of 1-5% growth. But it lowered its fiscal 2026 net earnings per share outlook to 1-6% growth from 3-9%. The change reflects higher restructuring charges.

P&G expects sales to pick up in the second half of the fiscal year. Schulten said upcoming product innovations should drive stronger performance. He described the second quarter as “what we fully expect will be the softest quarter of the fiscal year.”

Shares fell about 1% in premarket trading following the announcement. P&G earlier lowered its tariff cost estimate to $400 million from $1-1.5 billion.

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