CNBC Television• Oct 24, 2025• 7:08Interview

P&G CEO Jon Moeller on Q1 2026 results: 40th consecutive quarter of organic sales growth

Jon Moeller•CEO, Procter & Gamble

Executive Summary

Procter & Gamble reported strong Q1 2026 results, beating both earnings and revenue estimates and affirming its full-year guidance.
The company demonstrated significant resilience, marking its 40th consecutive quarter of organic sales growth and its 10th consecutive year of EPS growth.
Geopolitical and commodity cost headwinds have significantly eased, with the projected tariff impact for the fiscal year cut in half from $800M to $400M, partly due to favorable policy changes in Canada and the U.S.
The company is undergoing a leadership transition, with CEO Jon Moeller stepping down on January 1st to become executive chairman, signaling strategic continuity.

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Concerns Raised

Ongoing consumer uncertainty in a challenging macroeconomic period.
Flat year-over-year sales volumes, indicating reliance on pricing for growth.
Lingering trade tensions with China, despite recent improvements in the tariff environment.

Opportunities Identified

Significantly reduced headwinds from tariffs and commodity costs, improving the margin outlook.
Strong, accelerating growth in the crucial China market, particularly in premium categories.
Broad-based performance with 8 of 10 categories and 6 of 7 regions holding or growing sales, indicating portfolio strength.

Key Themes

Resilience and Consistent Performance

P&G highlighted its 40th consecutive quarter of organic sales growth and its 10th straight year of EPS growth. This consistency, combined with affirming full-year guidance amidst a challenging environment, showcases the company's operational strength and the durability of its brand portfolio.

This demonstrates the company's ability to execute its strategy and deliver predictable results for investors, even in the face of macroeconomic uncertainty and flat sales volumes.

Navigating Geopolitical and Macroeconomic Headwinds

The company has successfully managed significant external pressures, including tariffs and commodity costs. Favorable developments, such as Canada rescinding retaliatory tariffs and the U.S. administration providing exemptions, have halved the projected tariff headwind, improving the company's margin outlook.

This highlights P&G's effective supply chain management and government relations, which directly de-risk the business and provide a clearer path to profitability.

Strategic Growth in China

Despite a difficult market environment, P&G achieved 6% sales growth in mainland China, with double-digit growth in key categories like diapers and the premium SK-II brand. The growth has been sequentially improving over the last four quarters, indicating a successful strategic focus on innovation and premiumization.

China remains a critical growth engine, and P&G's ability to grow market share and drive premium product sales there is a key indicator of its long-term global prospects.

Pricing Power and Cost Management

With sales volumes flat, P&G relied on a 1% price increase to help drive revenue growth. This was supported by a significant reduction in expected commodity cost headwinds (from $200M to $100M), particularly from the petrochemical complex, allowing the company to maintain margins without overly aggressive pricing.

This balance demonstrates disciplined financial management and the brand strength required to pass on some costs to consumers without destroying demand, a crucial capability in an inflationary environment.

Leadership Continuity

The interview marks CEO Jon Moeller's final earnings call before he transitions to the executive chairman role. This planned succession ensures a stable transfer of leadership and strategic continuity for the company.

A smooth leadership transition reduces uncertainty for investors and signals that the company's successful long-term strategy is likely to be maintained.

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Topics

Procter & Gamble (PG)Earnings Report Q1 2026 CEO Transition Jon Moeller Organic Sales Growth Earnings Per Share (EPS)Revenue Beat Corporate Guidance Tariffs Commodity Costs China Market Consumer Packaged Goods (CPG)Pricing Strategy Geopolitics

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