P&G reports weakest sales growth since 2018, plans layoffs and price raises

USA Today

5 days ago

Procter & Gamble reported its poorest sales increase since 2018, skimped on details of its restructuring plans and disclosed it will raise prices next month on a quarter of its products in North America, in part due to the ongoing trade wars waged by President Donald Trump.
The maker of Tide laundry detergent and Pampers diapers reported a $16 billion annual profit on sales of $84.3 billion. During its fourth quarter, profit was $3.6 billion on sales of $20.9 billion, beating Wall Street forecasts. Organic sales (which excludes impact from foreign exchange, acquisitions and divestitures) in latest year were the worst in seven years.
The initial report did not offer the promised new details of P&G's newly announced restructuring plans. During a July 29 conference call with Wall Street analysts, CEO Jon Moeller said P&G is still working on its restructuring but mentioned some specifics: the company will narrow the variety of its feminine pads in Asia, discontinue business operations in Bangladesh and trim some overseas product offerings for the company's Oral Care, Fabric Care and Grooming businesses.
"It takes time to plan the execution of these moves ... so we can't discuss all the details today," Moeller told analysts.
Tariffs to cost company an extra $1 billion
The Cincinnati-based consumer products giant said in June it would update its plans to cut 7,000 jobs as part of a restructuring move when it reported financial results. The changes come as the company is struggling to maintain growth as consumers struggle with economic uncertainty, political instability and trade wars launched this year by Trump.
Looking ahead, P&G said tariffs on its products and on raw materials used in them would cost the company an extra $1 billion in the 2026 fiscal year. Chief Financial Officer Andre Schulten said much of that impact was concentrated in North America between key materials imported from around the world and products exported to Canada.
To help offset that, Schulten said 25% of the company's products would see "mid single digit" price increases, partly due to tariffs amid the ongoing trade disputes and also to pay for product innovations.
"That is not vastly different from what we typically take with innovation, a couple of points higher to account for the tariff impact that we can't offset with productivity," Schulten said.
P&G said organic sales growth for the next year is expected to be between 0% to 4%.
P&G to get new CEO
Meanwhile, on July 28, P&G announced its No. 2 executive, Shailesh Jejurikar, the 58-year-old chief operating officer, will take over as CEO on Jan. 1, 2026.
P&G employs 108,000 worldwide, including 10,000 in Greater Cincinnati.
In April, P&G forecast its organic sales growth (which excludes impact from foreign exchange, acquisitions and divestitures) for the fiscal year ended June 30 would be a paltry 2% – the worst increase since 2018. In June, the company also disclosed that outside core markets of the U.S., China, Japan, Canada and Western Europe, organic sales were growing a meager 1%.
Previous sales slowdowns have prompted pressure to slash operations at P&G. During P&G's last spate of reorganization and cutbacks, the company cut 34,000 jobs between 2012 and 2018, slimming the company down to 92,000 workers worldwide. Thousands left in divestitures, including the sale or spin-offs of Iams pet food, Duracell batteries and a large portfolio of more than 40 beauty brands, including Clairol and Wella hair coloring and CoverGirl makeup.
P&G said it would cut nonmanufacturing jobs (a little over half the company's headcount) by 15%. The cuts could have a larger impact in the Cincinnati region as the company employs around 10,000 mostly office workers in its hometown.
Last year, P&G booked a $14.9 billion profit on total sales of $84 billion.