Procter & Gamble Co. ( PG ) shares rose in early trading on Friday after beating first-quarter estimates and raising its earnings outlook.

The company reported first-quarter adjusted earnings per share of $1.99 (+3% year over year), beating the analyst consensus estimate of $1.90. Quarterly sales of $22.386 billion outpaced the Street view of $22.175 billion.

Procter & Gamble ( PG ) said quarterly net sales rose 3%, while organic sales increased 2%, driven by a one-percent increase from higher pricing and a one-percent increase from favorable mix.

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Segment Details

Organic volume had a neutral impact on sales for the quarter.

The company reported $5.4 billion in operating cash flow and $4.8 billion in net earnings, with 102% free cash flow productivity.

Beauty segment organic sales increased 6% year over year.

Grooming segment organic sales increased 3% year over year, driven by innovation-driven pricing, primarily in North America and Europe.

The Health Care segment’s organic sales increased 1% year over year. 

Fabric and Home Care segment organic sales were unchanged from the year-ago period. 

Baby, Feminine, and Family Care segment organic sales were unchanged year over year.

Profit & Margins

Gross profit in the quarter under review soared 2% year over year to $11.499 billion.

Core gross margin for the quarter decreased 50 basis points versus the prior year, and on a currency-neutral basis decreased 30 basis points.

Quarterly operating profit increased 1% to $5.856 billion. The quarter’s core operating margin was unchanged from the prior year and increased 40 basis points on a currency-neutral basis.

Gross productivity savings of 230 basis points also contributed to the margin.

The company exited the quarter with cash and equivalents worth $9.556 billion.

Outlook

Procter & Gamble ( PG ) reaffirmed its fiscal 2026 GAAP EPS guidance of $6.71 to $7.09, in line with the $6.91 analyst estimate.

The company raised its fiscal 2026 adjusted EPS guidance to $6.83-$7.10 from $6.83-$7.09, compared with the $6.97 analyst estimate.

It also nudged its sales outlook to $85.127 billion-$88.498 billion from $85.126 billion-$88.498 billion, versus expectations of $86.919 billion.

The company continues to expect a net headwind of roughly $250 million after-tax from modestly higher net interest expense and a higher core effective tax rate versus the prior year.

The company also continues to expect that favorable foreign exchange rates will be a tailwind of approximately $300 million after tax.

Collectively, these impacts amount to a $0.19 per-share headwind for fiscal 2026.

P&G continues to expect adjusted free cash flow productivity of 85% to 90%.

It plans to pay about $10 billion in dividends and repurchase roughly $5 billion of common stock in fiscal 2026.

PG Price Action: Procter & Gamble ( PG ) shares were up 2.35% at $155.78 at the time of publication on Friday, according to Benzinga Pro data.

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