PG changes
Pick any two versions below to diff them.
- Thesis
- removed: Procter & Gamble grows added: Investors see a company that sells no more units than a year ago. In fiscal 2026, all of the 1% organic sales removed: mainly through added: growth came from higher prices, removed: not more units sold. Investors worry that shoppers will keep switching added: and volume was flat. Weak consumer demand and heavy promotions make further price increases difficult. Higher costs for commodities, energy and transport also cut fiscal 2027 earnings, and P&G expects first-quarter core EPS to removed: store brands as prices keep rising. added: fall 5% or more. The company is removed: also cutting added: about 7,000 jobs and dropping weak removed: brands over a two-year plan. This plan adds added: brands, and these one-time costs removed: that hide removed: today's true added: part of its earnings power. For the gap to close, unit volume must removed: stop falling while these one-time added: grow again without new price cuts that reduce the margin. The restructuring costs removed: end. Price increases must also removed: keep working without pushing more shoppers toward store brands. The board named CEO Shailesh Jejurikar as chairman too, giving him full control over added: end inside the removed: turnaround. added: plan, and core EPS must stay in the $6.89 to $7.11 range for fiscal 2027. The removed: next added: Thorne supplements purchase must also add growth without a large cost. The first test comes at fiscal first-quarter earnings on October 22, removed: 2026. The added: 2026, and the restructuring plan removed: itself runs through added: ends in mid-2027. If volume recovers removed: and added: over the removed: extra costs end on schedule, added: next two to four quarters, the gap removed: could close within a few quarters. added: can close. If removed: store-brand switching keeps growing, added: volume stays flat and costs stay high, the discount removed: could added: can last into 2027.
- Risks
- removed: Almost added: In fiscal 2026, all of removed: fiscal 2026 added: the organic sales growth came from removed: price added: price, and removed: mix, not from selling more units. added: volume was flat. Consumer demand is weak and promotions are heavy. If removed: more shoppers trade down added: P&G must cut prices to removed: store brands, further price increases may stop translating into sales growth. added: sell more units, its margin falls. Fiscal 2027 guidance includes about $0.56 per share of cost headwinds: about $1 billion after tax from commodities, energy and transport, and smaller amounts from interest, non-operating income and currency. If these costs increase more, core EPS can fall below the guidance range. P&G is in the middle of a two-year restructuring plan to cut about 7,000 jobs and exit weaker removed: brands, carrying up added: brands. The plan costs $1.0 to $1.6 billion added: before tax over fiscal 2026 and 2027, and more than half came in added: fiscal 2026. New charges removed: through mid-2027. These charges are already cutting reported added: or a longer plan would cut earnings removed: per share. Tariffs still raise P&G's costs. The company expects several hundred million dollars in tariff costs, and added: again. Tariff changes are a risk outside the fiscal 2027 removed: guidance already includes a per-share cost from tariffs, commodities, and currency swings. A change in trade policy could push these costs higher. added: guidance. The $3.8 billion Thorne purchase can also fail to give the growth that P&G expects.
- Balance sheet
- Cash: $9.9B Debt: $34.1B Net debt: $24.2B EBITDA, last 12 months: $22.9B Net debt / EBITDA: 1.1× (low) Interest cover: 22× Undrawn credit line: $8.0B Debt due within 12 months: $11.3B Ratings: Moody's Aa3 (stable outlook), S&P AA- (stable outlook) Procter & Gamble funds itself with cash from operations and with unsecured debt that the parent company issues. The strong rating keeps borrowing easy, and dividends and buybacks use about all of the cash it makes. At June 30, 2026, the debt due within one year included added: $6.5 billion of long-term debt that becomes due and $4.8 billion of commercial paper. removed: $22.8 billion added: Long-term debt was removed: long-term notes in US dollars and euros, added: $22.8 billion, at removed: an added: a weighted average rate of removed: 3.3%. added: 3.3% after interest rate swaps. EBITDA is fiscal 2026 operating income plus depreciation and amortization. The undrawn bank removed: facility supports added: facilities support the commercial paper removed: program. added: program: $3.2 billion until October 2030 and $4.8 billion for 364 days until October 2026. Current liabilities were $12.5 billion more than current assets. This is normal for P&G, because it pays maturing short-term debt with new commercial paper. In fiscal 2026, P&G paid $10.2 billion in dividends and spent $5.0 billion on buybacks. This used about all of its $15.8 billion adjusted free cash flow. The fiscal 2027 plan is about $10 billion in dividends and $5 billion in buybacks, slightly more than the cash it expects to make. removed: Thus added: P&G will also pay $3.8 billion in cash for Thorne, with closing expected between October and December 2026. If debt removed: stays added: pays for all of it, gross debt increases to about removed: flat or rises a little. added: $38 billion. As of Jun 30, 2026.
- Checkpoints
- Oct 22, 2026: Fiscal Q1 2027 earnings: removed: volume added: volume, costs and removed: restructuring costs. added: guidance. Pending. Watch: Flat or positive organic removed: volume and added: volume, a core EPS removed: on track for added: decline no worse than the added: 5% or more that P&G guided, and an unchanged $6.89 to $7.11 fiscal 2027 range pass; a removed: new added: guidance cut or a volume decline added: fails. Dec 2026 (estimate): Thorne purchase closes. Pending. Watch: The $3.8 billion purchase closes between October and December 2026 with removed: growth only from price added: no large change to the terms passes; a block by regulators or a long delay fails. Jan 2027 (estimate): Fiscal Q2 2027 earnings: holiday-quarter volume and guidance. Pending. Watch: Organic sales growth inside the 1% to 3% guidance with volume holding up passes; a guidance cut or removed: more trading down to store brands added: a new fall in volume fails. Jul 2027 (estimate): Fiscal 2027 results: restructuring plan ends. Pending. Watch: Restructuring charges that stop inside the removed: $1 added: $1.0 to $1.6 billion plan and a higher core operating margin pass; new charges or a longer plan fail.
- Recent events
- added: Sep 24, 2026: P&G confirmed that it will discuss its fiscal first-quarter 2027 results on October 22, 2026. Aug 4, 2026: P&G agreed to buy Thorne, a maker of premium vitamins and supplements, for $3.8 billion in cash. Thorne will join the Health Care segment. P&G expects the purchase to close between October and December 2026, after regulatory approvals. Jul 29, 2026: P&G reported fiscal 2026 results. removed: Full-year added: Net sales were $87.0 billion, organic sales grew 1%, and removed: full-year core removed: earnings per share added: EPS was $6.89. added: All of the organic growth came from price, and volume was flat. For fiscal 2027, P&G guided organic sales growth of 1% to 3% and core EPS of $6.89 to $7.11, and it expects first-quarter core EPS to fall 5% or more. Jul 29, 2026: P&G's board named CEO Shailesh Jejurikar as Chairman, effective August 1, 2026. He succeeds Jon Moeller, who retired from the board on July 31, 2026, and from the company on August 14, 2026. added: Apr 14, 2026: P&G raised its quarterly dividend by 3% to $1.0885 per share. This is its 70th annual dividend increase in a row. Jun 5, 2025: P&G announced a two-year restructuring plan to cut about 7,000 non-manufacturing jobs, removed: roughly added: about 6% of its added: total workforce, and to removed: prune weaker added: exit some brands and categories.