Procter & Gamble (P&G) has confirmed that it will raise its prices due to US President Donald Trump’s trade tariffs.
The consumer goods giant expects to take a $1bn hit from the levies, it said in its fourth quarter and full-year financial results published yesterday (29 July).
In an earnings call with investors, P&G CFO Andre Schulten said prices will increase by a “mid-single-digit” percentage on around a quarter of products sold in the US in the new fiscal year.
P&G had warned in April that it was likely to hike prices to mitigate rising costs from the levies, but had not said by how much or when they would take effect.
This news comes a day after the company named COO Shailesh Jejurikar its new President and CEO, succeeding Jon Moeller who will become Executive Chairman, effective 1 January 2026.
P&G revealed a mixed picture in terms of its finances.
In the past three months of the fiscal year to 30 June, P&G’s revenue grew to $20.89bn, up 2% on the same period last year, beating analysts’ expectations.
Organic sales in P&G’s beauty division, which includes brands Olay and Head & Shoulders, were up 1% in the fourth quarter.
Hair care was flat as innovation-driven growth in Latin America and Europe was offset by volume declines in North America and Greater China.
Personal care grew in the low single-digits driven by volume growth in North America, which was partially offset by negative impacts from unfavorable geographic mix.
Skin care also remained flat as volume growth in Greater China was offset by a volume decline in North America and unfavourable mix.
Grooming, with brands such as Gillette and Venus, also grew 1%, driven by innovation-based pricing, partially offset by an appliance volume decline.
The fabric and home care side of the business also grew 1%, as did baby, feminine and family care.
Speaking to investors, Moeller said the company was pleased with its performance last fiscal year “in the face of a very dynamic, difficult and volatile environment”.
There is “more work to do” he added, “to offset the headwinds that are largely not in our control”.
On top of the US$1bn tariff hit, headwinds the company expects include $200m after tax from unfavourable commodity costs, and around $250m after tax from “modestly higher net interest expense and its core effective tax rate”, while forex tailwinds are expected to be $300m after tax.
“Combined, the net of these impacts equates to a headwind of $0.39 per share for fiscal 2026, or a 6% drag on core EPS [earnings per share] growth,” the company said in a statement.
P&G’s outlook for the full 2026 fiscal year is $6.83 to $7.09 per share, a rise of 2% on 2025 using the midpoint of $6.96.
Net sales growth is estimated between 1% and 5%, below analysts expectations.
Moeller said that it will exit some “categories, brands and product forms” in some markets and this may also include some brand divestitures, as part of plans to shore up growth.
“We have put in place strong plans to continue to deliver for all stakeholders in the current environment,” he said.
“In fiscal 2026, we expect to deliver another year of organic sales growth, core EPS growth and strong adjusted free cash flow productivity.
“We remain committed to our integrated strategy – a focused product portfolio of daily use categories where performance drives brand choice, superiority – across product performance, packaging, brand communication, retail execution and consumer and customer value – productivity, constructive disruption, and an agile and accountable organisation, all aimed at delivering sustainable, balanced growth and value creation.”
P&G announced in June that it plans to cut 7,000 jobs over the next two years – a 15% reduction in its workforce – and sell off some brands as part of a restructuring plan.