- Company name
- Procter & Gamble
- Sector
- Consumer packaged goods
- About
- Procter & Gamble makes household and personal care products. Its brands include Tide, Pampers, Gillette, and Crest. Retailers around the world sell these products to consumers every day. The company earns money through steady, repeat purchases of everyday items.
- Thesis
- Procter & Gamble grows sales mainly through higher prices, not more units sold. Investors worry that shoppers will keep switching to store brands as prices keep rising. The company is also cutting 7,000 jobs and dropping weak brands over a two-year plan. This plan adds one-time costs that hide today's true earnings power. For the gap to close, unit volume must stop falling while these one-time costs end. Price increases must also keep working without pushing more shoppers toward store brands. The board named CEO Shailesh Jejurikar as chairman too, giving him full control over the turnaround. The next test comes at fiscal first-quarter earnings on October 22, 2026. The restructuring plan itself runs through mid-2027. If volume recovers and the extra costs end on schedule, the gap could close within a few quarters. If store-brand switching keeps growing, the discount could last into 2027.
- Risks
- Almost all of fiscal 2026 organic sales growth came from price and mix, not from selling more units. If more shoppers trade down to store brands, further price increases may stop translating into sales growth.
P&G is in the middle of a two-year restructuring plan to cut about 7,000 jobs and exit weaker brands, carrying up to $1.6 billion in charges through mid-2027. These charges are already cutting reported earnings per share.
Tariffs still raise P&G's costs. The company expects several hundred million dollars in tariff costs, and fiscal 2027 guidance already includes a per-share cost from tariffs, commodities, and currency swings. A change in trade policy could push these costs higher.
- 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 $4.8 billion of commercial paper. $22.8 billion was long-term notes in US dollars and euros, at an average rate of 3.3%. EBITDA is fiscal 2026 operating income plus depreciation and amortization. The undrawn bank facility supports the commercial paper program. 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. Thus debt stays about flat or rises a little.
As of 2026-06-30.
- Checkpoints
- Oct 22, 2026: Fiscal Q1 2027 earnings: volume and restructuring costs. Pending. Watch: Flat or positive organic volume and core EPS on track for the $6.89 to $7.11 fiscal 2027 range pass; a new volume decline with growth only from price 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 more trading down to store brands fails.
Jul 2027 (estimate): Fiscal 2027 results: restructuring plan ends. Pending. Watch: Restructuring charges that stop inside the $1 to $1.6 billion plan and a higher core operating margin pass; new charges or a longer plan fail.
- Recent events
- 2026-07-29: P&G reported fiscal 2026 results. Full-year organic sales grew 1%, and full-year core earnings per share was $6.89.
2026-07-29: 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.
2025-06-05: P&G announced a two-year restructuring plan to cut about 7,000 non-manufacturing jobs, roughly 6% of its workforce, and to prune weaker brands and categories.