Procter & Gamble’s sales slid in the first fiscal quarter, but the company is doubling down on its expectations for the fiscal year.
Net sales for its first quarter of fiscal 2025 slipped 1 percent to $21.7 billion, while organic sales increased 2 percent. Diluted net earnings per share were $1.61, a 12 percent decline from the year prior.
The company maintained its guidance for fiscal 2025, anticipating organic sales — which eschew foreign exchange, acquisitions and divestiture impacts — growth of 3 to 5 percent.
For its beauty division, which includes brands Olay, Ouai, Mielle Organics, Tula Skincare and Head & Shoulders, net sales dropped 5 percent year-over-year to roughly $3.9 billion.
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Hair care was a bright spot in North America, Europe and Latin America, though that didn’t entirely offset declines in China, where SK-II remains particularly challenged by consumer sentiment.
“It will likely be a few quarters before we return to growth in China,” said Andre Schulten, P&G’s chief financial officer on the company’s earnings call, noting the “headwinds” SK-II experienced in that geography.
China overall, for the company, declined 15 percent. “Top-line growth across 85 percent” of the business globally, Schulten said, would allow the company to maintain its guidance. “It will grow stronger with innovation in the back half.”
Schulten is betting on innovation to keep the business on track. “Consumers don’t stop washing their hair or doing their laundry, and they are categories where product performance is important to consumers. The cost of failure is higher than a product that would actually perform in line with what their expectations are,” he said. “That will lead the consumer to continue to trade into P&G, and to trade up. You see that with share growth in the U.S.”
The company completed “substantial liquidation” of operations in Argentina, it said.
On the grooming side, where P&G owns the Art of Shaving, Gillette and more, net sales were $1.7 billion, roughly flat from last year. A statement from the company cited “innovation-driven volume growth partially offset by unfavorable geographic mix.”
In health care, net sales notched 2 percent gains to $3.1 billion. Oral care also saw falling sales in China, though the category was still up “low single digits,” said the company.
