Procter & Gamble Q1’25 Earnings Preview

Procter & Gamble (NYSE: PG) is scheduled to report its fiscal Q1 2025 outcomes on Friday, October 18 (P&G’s fiscal ends in June). We anticipate the corporate to put up upbeat outcomes, with income of $22.1 billion and earnings of $1.92 per share, in comparison with the consensus estimates of $21.96 billion and $1.90, respectively. Whereas the corporate’s top-line is predicted to see low single-digit progress, its backside line will probably see an increase within the mid-single-digits, owing to the impression of restructuring prices. Our interactive dashboard evaluation of Procter & Gamble’s FY 2025Q1 Earnings Preview has extra particulars on how the corporate’s revenues and earnings will probably pattern for the quarter. 

What Tendencies Will Drive P&G’s Q1 Outcomes?

P&G ought to see slight progress in gross sales on the again of modest quantity good points. Its grooming enterprise has carried out comparatively higher than others currently, a pattern more likely to proceed in Q1 as effectively. Grooming will probably proceed to see pricing good points, whereas Child Care gross sales might pattern decrease amid continued decline in market share.

The corporate is present process market portfolio restructuring, which is predicted to impression the general margin profile. P&G expects to document a cost of $750 million for collected foreign money translation losses in Q1. Nonetheless, its core earnings per share are anticipated to see a progress larger than its gross sales, pushed by decrease shares excellent. P&G plans to spend $6 billion to $7 billion on share repurchases in fiscal 2025.

How Did P&G Carry out In The Earlier Quarter? 

Procter & Gamble’s revenues have been flat y-o-y at $20.5 billion in This autumn’24, as 1% pricing good points and 1% quantity good points have been offset by a 2% unfavorable international alternate impression. Taking a look at segments, Grooming noticed 7% natural gross sales progress, whereas Well being Care was up 4%, Magnificence up 3%, and Cloth & Dwelling Care up 2%. Child, Female & Household Care noticed a 1% decline in gross sales on an natural foundation. On the margin entrance, the corporate reported a 100 bps decline in core working margin to 19.3% in This autumn, primarily reflecting the impression of foreign money translation cost and better SG&A bills. Regardless of a flat income and margin contraction, P&G reported a slight acquire within the backside line at $1.40, versus $1.37 within the prior-year quarter, because of a 0.5% decline in whole shares excellent.

What Does This Imply For PG Inventory?

PG inventory is up 20% thus far this yr, broadly aligning with the good points for the S&P 500 index. Notably, the annual returns for PG inventory over the current years have been significantly much less risky than the S&P 500. Equally, the Trefis High Quality (HQ) Portfolio, with a set of 30 shares, is much less risky. However, it has outperformed the S&P 500 annually over the identical interval. Why is that? As a bunch, HQ Portfolio shares offered higher returns with much less threat versus the benchmark index; much less of a roller-coaster trip, as evident in HQ Portfolio efficiency metrics.

We estimate Procter & Gamble’s Valuation to be $170 per share, near its present market value. Our forecast is predicated on a 24x P/E a number of for PG and anticipated earnings of $7.00 on a per share and adjusted foundation for the total fiscal 2025. The 24x determine aligns with the inventory’s common P/E a number of during the last 4 years.

Whereas PG inventory seems to be appropriately priced, it’s useful to see how Procter & Gamble’s Friends fare on metrics that matter. You will see different precious comparisons for corporations throughout industries at Peer Comparisons.