Inflation for essential consumer goods is easing.
That’s according to Procter & Gamble Company’s (P&G) financial Fiscal Year 2025 First Quarter report, released last week.
Still, the higher prices slowed the company’s sales volume, with beauty product sales taking the most significant hit, down 2 percent, followed by baby, feminine, and family care products, down 1 percent.
Sales were feeble in China due to a balance-sheet recession driven by falling asset prices. It has been putting pressure on consumer spending growth.
Moderate price hikes and slowed sales translated into an overall 1 percent decline in P&G’s net sales and a 12 percent decline in diluted earnings per share (EPS) for the quarter.
However, Jon Moeller, chairman of the board and president and CEO of P&G, focused on the company’s organic sales, which rose 2 percent for the quarter.
“Our organic sales growth, earnings, and cash results in the first quarter keep us on track to deliver within our guidance ranges on all key financial metrics for the fiscal year,” he said in a press release accompanying the release of the company’s financials.
In addition, Moeller reiterated P&G’s commitment to branded supercity and a business strategy of growth value creation for customers.
“We remain committed to our integrated growth strategy of 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 organization,” he said. “We have confidence this remains the right strategy to deliver balanced growth and value creation.”
John Haywood, president and co-founder of Haywood Wealth Management, sees a mixed picture in P&G’s first-quarter 2025 earnings report.
On the positive side, he joins the company’s chairman in pointing to the 2 percent organic sales growth rather than overall sales, adding that most of that growth comes from the core North American market, where sales rose by 4 percent.
In addition, Haywood focuses on P&G’s “core” rather than the diluted EPS, which rose 5 percent, to $1.93, and on the $4.4 billion the company returned to shareholders.
On the negative side, he sees some challenges reflected in the report. One of them is the company’s flat revenue. “Revenue for first quarter 2025 was flat at $21.7 billion, while net income dropped by 11 percent compared to the same quarter last year,” he told the Epoch Times via email.
“Greater China continues to face difficulties, with a 15 percent decline in organic sales, and commodity cost headwinds are expected to affect the company’s fiscal outlook.”
The other challenge is the company’s optimistic expectations. “P&G has maintained its guidance, anticipating core EPS growth of 5 percent to 7 percent for fiscal 2025, but external risks, particularly in Asia-Pacific and the Middle East, could weigh on future results,” he added. “The report also highlights growing concerns about potential deceleration in P&G’s historically strong markets like North America and Europe.”
Haywood thinks P&G’s financial results point to strength in certain regions, but he challenges remaining, particularly in China and commodity costs.
Anthony Miyazaki, a brand strategist and professor of marketing at Florida International University, finds P&G’s latest earnings report “interesting,” because it reflects consumer resilience—the willingness of most consumers to continue to buy the company’s products at elevated prices.
“This isn’t particularly surprising in the P&G case because many of their brands are considered to have long-term loyalty among their target audiences,” he told The Epoch Times via email. “Brand loyal consumers may complain about inflated prices but refrain from brand switching. What many may think are commodity products are often in the minds of the consumers not interchangeable with competing brands.”
Still, Miyazaki believes there’s always a limit to what companies with a strong brand such as P&G can charge for their products. But he thinks that limit has yet to be reached.
“Many analysts will suggest that consumers are unhappy with the elevated prices, but history has shown us many times over that when people continue to buy, it’s a sign that they see sufficient value in the offerings to keep them coming back for more,” he said.
