Procter & Gamble’s (P&G) organic sales grew 3% in the third quarter, but the consumer goods giant warned of a hit from the conflict in the Middle East.
Net sales, which excludes the impact of currency fluctuations as well as acquisitions and divestitures, grew 7% to US$21.2bn in the three months to 31 March 2026, compared to the same period last year.
The “solid quarter of progress” was driven by a 2% increase from volume and 1% from higher pricing.
Mix had a “neutral impact” on sales in the period, the company said in a statement.
The performance follows P&G’s softest quarter in Q2, when sales grew just 1% in what it described as a “challenging” environment.
In Q3, P&G’s beauty division, which includes anti-dandruff hair care line Head & Shoulders and mass care brand Olay, saw organic sales grow 7%.
Hair care sales grew in the mid-single digits driven by innovation-based volume growth, favourable geographic mix and pricing.
Skin care sales growth was also in the high single digits due to a favourable premium product mix and a volume increase.
This was partially offset by merchandising investments, primarily in Greater China.
Sales in P&G’s grooming segment, which includes shaving player Gillette and heritage fragrance brand Old Spice, were up 1%.
Innovation-based pricing, primarily in North America and Europe, was partially offset by volume declines.
“We delivered a solid acceleration in top-line results in our fiscal third quarter, with broad-based growth across product categories and regions,” said Shailesh Jejurikar, President and CEO of P&G.
“We are increasing investments to accelerate momentum with consumers despite the challenging geopolitical and economic environment, while still maintaining our guidance ranges for the fiscal year.
“We continue to believe the best path to sustainable, balanced growth is by strengthening execution of our integrated growth strategy.
“We are confident in the progress we are making and excited about the longer-term opportunity to leverage P&G’s strengths and unique capabilities to create the CPG company of the future.”
Middle East impact on P&G
Commodity costs are expected to add $150m of headwinds, P&G said in the statement.
On a call with investors, P&G CFO Andre Schulton said that this was from a “combination of commodity-linked cost inflation, feedstock exposures and logistics disruptions resulting from the conflict in the Middle East”.
He added: “Almost all of these increased costs will be in the fiscal fourth quarter.”
P&G still expects full-year sales to come within its guidance range for the full 2026 financial year.
While the company will not issue guidance on 2027 until July, Schulton outlined that the annual impact of Brent Crude rising to $100 per barrel – compared to a “pre-conflict oil price in the mid-60s” – is expected to be roughly $1bn after tax.
“The noise, I would call it, from the commodity exposure is significant,” said Schulton.
“As you know, $1bn after tax is nothing to sneeze at from a headwind standpoint.”
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