Those costs will present the company with a commodity cost headwind of $1.4 billion after tax during the fiscal year, according to the release.
Procter & Gamble’s fiscal year 2027 guidance now includes organic sales growth of 1% to 3% and core earnings per share (EPS) of 0% to 3%, according to an earnings release presentation released Thursday.
While sharing this outlook during a Thursday earnings call, Procter & Gamble Chief Financial Officer Andre Schulten said the higher costs result primarily from the conflict in the Middle East.
“This estimate assumes an effective Brent crude oil price of $100 a barrel,” Schulten said of the headwind. “Due to the duration of higher oil prices, we now expect materially higher cost headwinds in Q2 and the second half of fiscal 2027.”
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Schulten said earlier in the call that Procter & Gamble expects the macro environment to remain “volatile and challenging” in terms of cost, currencies, geopolitical dynamics and other factors.
“We will be closely watching consumer demand as high fuel and energy costs persist into the fall and winter,” Schulten said.
PYMNTS reported Friday (Oct 16) that the Federal Reserve Bank of New York found that surging costs had turned the business outlook of executives in its region negative.
On Oct. 14, PYMNTS reported that the Federal Reserve found that consumer spending held steady even as consumer confidence slipped.
Procter & Gamble said Thursday that during the quarter ended Sept. 30, the company saw year-over-year growth of 4% in organic sales and 1% in core EPS. Net sales also increased 4% to $23.3 billion, according to the release.
Procter & Gamble saw organic sales growth in all 10 of its product categories and all six of its regions, according to the presentation.
When an analyst said during Thursday’s call that it seems the consumer remains resilient and category growth has not really changed, Schulten agreed.
“In aggregate, the consumer is resilient,” Schulten said. “We see 2.5% to 3% value growth across all categories globally, and that is unchanged, maybe a little bit better than what we saw and reported last quarter.”
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