This transcript appears to be mislabeled data (it's actually PG&E utility content, not Procter & Gamble). Let me pull the correct P&G materials instead.# Procter & Gamble (PG) — Q4 FY2026 Earnings Preview Report Date: Wednesday, July 29, 2026, before market open | Fiscal Period: Q4 FY2026 (quarter ended June 30, 2026)
P&G reports fiscal fourth-quarter and full-year 2026 results tomorrow morning. Sentiment heading in is mixed: the stock has been treated as one of the most loved stocks in a group currently out of favor due to muted top line trends and margin pressure. Consensus is looking for organic growth of approximately 2.1% for the quarter, with consensus expectations for gross margins of 48.4%, operating margins of 20%, and EPS of $1.42.
That EPS estimate is notable — it would represent a year-over-year decline from the $1.48 core EPS P&G posted in Q4 FY2025, and it sits at the low end of the implied fourth-quarter run-rate from management's own full-year guidance (see below). The stock itself has lagged peers badly this year: PG shares are up only ~5% year-to-date through July 28, versus roughly +28% for Coca-Cola, +19% for Colgate, and +12% for Kimberly-Clark, and shares are running about 11% below their February 2026 high (~$167). Coca-Cola's July 28 beat-and-raise print, released the day before P&G reports, raises the sector bar somewhat.
On the April 24, 2026 call, CFO Andre Schulten characterized the quarter as a "solid acceleration": organic sales increased more than 3% versus the prior year, with volume up 2 points and pricing up 1 point, and broad-based growth across the business with each of our 10 product categories growing organic sales. Per the 10-Q, reported net sales in the March quarter were $21,235 million, up 7%, while gross margin decreased 150 basis points to 49.5% and operating margin decreased 150 basis points to 21.5%. Core EPS was $1.59 versus $1.54 a year ago.
Critically, management flagged that Q4 would be softer and margin-challenged: - We expect this to result in fourth quarter organic sales somewhat lower than third quarter, largely reflecting a roughly one-point pull-forward of volume into Q3 from trade-inventory building ahead of potential tariff/supply disruptions. - On costs: we now expect a headwind of approximately $150 million after tax for the fiscal from a combination of commodity-linked cost inflation, feedstock exposures and logistics disruptions resulting from the conflict in the Middle East… Almost all of these increased costs will be in the fiscal fourth quarter. - As a result: Given all the above, we now expect full year EPS results to be towards the lower end of the guidance range.
Management maintained (as of April) these full-year targets, which tomorrow's print will close out: - Organic sales growth: in line to +4% versus FY25 - Core EPS: $6.83–$7.09 (in line to +4% vs. FY25's $6.83), guided toward the low end - Tariffs: Our fiscal '26 outlook continues to call for approximately $500 million before tax and higher costs from tariffs — down meaningfully from the ~$1 billion pretax estimate given at the start of the year, aided partly by a February 2026 Supreme Court ruling that the tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were invalid, with approximately $200 million in IEEPA tariffs that may be recoverable (not yet booked). - Adjusted free cash flow productivity: 85%–90% (nine-month actual was 92%) - Cash return to shareowners: roughly $15 billion (~$10B dividends, ~$5B buybacks)
Through nine months (per the 10-Q), the company had already delivered net sales of $65.8 billion, an increase of 4%... organic sales increased 2% versus the prior year period and Core EPS... increased 2% to $5.46. Backing that into the full-year range implies Q4 core EPS of roughly $1.37–$1.63, with the "lower end" language and the $1.42 Street estimate suggesting the quarter will land near the bottom of that band.
a) FY2027 initial guidance — the biggest single item. Management explicitly deferred FY27 guidance to this call: We won't provide guidance for fiscal '27 until our next call in July. Investors will be watching for the shape of next year's algorithm — organic growth range, EPS growth range, tariff/commodity assumptions, and how much of the restructuring savings are expected to flow through.
b) Margin trajectory and pricing power. Gross margin has been under pressure all year (Q3 down 150bps; nine-month down 110bps) from unfavorable mix, tariffs, restructuring costs, and commodities, partially offset by productivity. Schulten was notably unconcerned about margin optics in isolation, arguing if we continue to drive great productivity... if we continue to drive innovation that's winning even though it's gross margin dilutive... I feel great about it because it will drive top line growth and it will drive earnings growth. Watch for whether that framing holds given the extra Q4 commodity/logistics hit from the Middle East conflict.
c) Restructuring execution. P&G's portfolio and productivity plan to streamline its portfolio and organization... expects to incur approximately $1.5 to $2.0 billion in before-tax restructuring costs over a two-year period, including a plan for a reduction of up to 7,000 non-manufacturing overhead personnel by the end of fiscal 2027, with over half of the costs under this plan by the end of fiscal 2026. Expect an update on headcount/savings progress and how much of it is now embedded in guidance versus still to come.
d) Regional/segment mix. China has shown sequential improvement (Q3 organic +3%, aided by SK-II and Pampers strength), but the underlying market remains soft; North America volumes benefited in Q3 from trade-inventory timing that should partly reverse in Q4; Baby Care in the U.S. remains a self-acknowledged problem area management is actively investing behind. Beauty has been the standout growth segment (nine-month organic +5%) while Baby/Feminine/Family Care has been roughly flat.
e) Capital returns and dividend. P&G just raised its dividend 3% in April, marking the 70th consecutive annual dividend increase and the 136th consecutive year P&G has paid a dividend, and the board approved the standard $1.0885 quarterly declaration in mid-July. Confirmation of the ~$15B annual cash-return plan (dividends + buybacks) will matter for the income-oriented holder base.
f) One-time items. The January 2026 dissolution of the Glad joint venture with Clorox added a $476 million proceeds event and an after-tax gain of $261 million in Q3 — already excluded from core EPS, but worth remembering when comparing GAAP diluted EPS (nine-month +7% to $5.36) against core EPS (+2% to $5.46).
This is a "show me" quarter for P&G. The Street already expects a year-over-year EPS decline and a deceleration in organic growth to ~2%, largely pre-telegraphed by management on the April call as a function of easing trade-inventory tailwinds and a concentrated hit from Middle East-conflict-related commodity, logistics, and reformulation costs. The stock's underperformance versus staples peers this year suggests low expectations are already partly priced in. The more important swing factor for the shares may not be the Q4 print itself but initial FY2027 guidance — specifically whether management can credibly point to accelerating restructuring savings, tariff mitigation, and innovation-led pricing to re-establish an earnings growth algorithm after a choppy back half of FY26, under new CEO Shailesh Jejurikar's first full-year outlook.