Procter & Gamble Co ( PG ) shares are trading lower after the company reported first-quarter sales of $21.74 billion (-1% Y/Y), missing the analyst consensus estimate of $21.91 billion.

Organic sales, which exclude the impacts of foreign exchange and acquisitions and divestitures, increased by 2%.

Organic sales growth was driven by a 1% increase in higher pricing and a 1% rise in organic volume, excluding the effects of acquisitions and divestitures.

Sales in the Beauty segment fell 5%, and the Baby, Feminine & Family Care segment declined 2%.

Meanwhile, the Grooming segment sales sales remained flat, while Fabric & Home Care grew 1% and Health Care sales increased 2%.

Gross profit remained flat at $11.3 billion. The reported gross margin expanded by 10 basis points to 52.1%, and the core gross margin was flat year-over-year.

Gains included 170 basis points from productivity savings and 30 basis points from pricing, offset by 90 basis points from higher commodity costs, 60 basis points from unfavorable mix, and 40 basis points from product reinvestments.

Operating margin expanded 30 basis points to 26.7% while operating income for the quarter rose 1% to $5.80 billion.

Adjusted EPS of $1.93 beat the analyst consensus of $1.90.

P&G held $12.16 billion in cash and equivalents as of September 30. Operating cash flow for the quarter was $4.3 billion.

The company returned around $4.4 billion of value to shareholders via $2.4 billion in dividend payments and $1.9 billion of share repurchases.

“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,” said Board Chairman, President, and CEO Jon Moeller.

Outlook: P&G reaffirmed FY25 guidance for all-in sales growth of 2% – 4% and organic sales growth of 3% – 5%.

This outlook equates to FY25 revenue of $85.72 billion – $87.40 billion (versus an estimate of $86.06 billion) and adjusted EPS of $6.91 – $7.05 (vs. consensus of $6.97).

P&G reaffirmed its outlook for adjusted free cash flow productivity of 90%, payment of around $10 billion in dividends and repurchasing $6 billion to $7 billion of common shares in fiscal 2025.

Investors can gain exposure to the stock via iShares U.S. Consumer Staples ETF ( IYK ) and Fidelity MSCI COnsumer Staples Index ETF ( FSTA ) .

Price Action: PG shares are down 0.81% at $170.88 premarket at the last check Friday.

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