Procter & Gamble stock fell 2.5% in early trading after the company issued guidance for the new fiscal year that fell short of market expectations. The consumer goods giant cited tighter consumer spending and persistent inflationary pressures as key factors dampening demand.
The company expects a $1 billion after-tax hit from raw materials inflation. Consequently, P&G projected organic sales growth of 1% to 3% for the upcoming fiscal year. This range trails the 2.44% organic revenue growth analysts had anticipated for fiscal 2027.
Earnings per share are forecast to range from $6.89 to $7.11, also missing the consensus estimate of $7.02 for core earnings. The divergence between company guidance and analyst expectations highlights growing uncertainty about consumer resilience in major markets.
Divergent Consumer Behavior
Procter & Gamble CFO Andre Schulten stated that the consumer remains stable overall. However, spending patterns show a clear divide based on income levels. Higher-income consumers continue to purchase the company’s latest innovations, while lower-income shoppers remain cautious with their expenditures.