Executive Summary
Procter & Gamble reported QQ3 2025 results characterized by modest organic growth and resilient profitability in a volatile consumer environment. Organic sales growth for the quarter was 1%, with price contributing 1 percentage point to organic growth; reported revenue was USD 19.776 billion. Net income of USD 3.769 billion and GAAP earnings per share (EPS) of USD 1.58 (diluted USD 1.54) reflected ongoing cost discipline and productivity gains, even as input costs and currencies introduced headwinds. Core earnings metrics showed margin expansion: core operating margin up 90 basis points (bps) and core gross margin down only 30 bps, aided by 280 bps of productivity improvements. Free cash flow productivity reached 75%, and the company returned approximately USD 3.8 billion to shareholders (USD 2.4B in dividends and USD 1.4B in stock buybacks), alongside a 5% dividend increase. Management reaffirmed a two-to-three year growth algorithm anchored in brand superiority, innovation, and productivity, while revising FY2025 organic sales growth to about 2% and guiding core EPS to USD 6.72β6.82 for the year. Tariff headwinds persist with an estimated USD 1.0β1.5 billion pre-tax annual impact, including a Q4 BT tariff range of USD 100β160 million, underscoring a material but manageable offset opportunity through productivity, selective pricing, and sourcing optimization. The quarter highlighted ongoing channel shifts toward online, big-box, and club channels, with France and Europe remaining a material drag during the period, while Latin America and Greater China offered pockets of growth (notably SK-II in Greater China). The execution race remains focused on sustaining innovation across price tiers, reinforcing a long-term growth trajectory even as near-term volatility persists.
Key Performance Indicators
QoQ: -12.06% | YoY:-2.50%
Key Insights
Revenue: USD 19.776B (YoY -2.07%; QoQ -9.62%). Gross Profit: USD 10.082B (YoY -2.50%; QoQ -12.06%). Operating Income: USD 4.558B (YoY +2.20%; QoQ -20.61%). Net Income: USD 3.769B (YoY +0.40%; QoQ -18.60%). EPS (GAAP): USD 1.58; Diluted EPS: USD 1.54. Gross Margin: 50.98%; Operating Margin: 23.05%; Net Margin: 19.06%. Effective Tax Rate: 18.6%. ROA: 3.06%; ROE: 7.21%; ROCE: 5.14%. DSO: 27.94 days; DIO: 68.70 days; CCC: 96.64 days; DPO: 134.73 days; CCC (cash conversion cycle): -38.09 days. Free C...
Financial Highlights
Revenue: USD 19.776B (YoY -2.07%; QoQ -9.62%). Gross Profit: USD 10.082B (YoY -2.50%; QoQ -12.06%). Operating Income: USD 4.558B (YoY +2.20%; QoQ -20.61%). Net Income: USD 3.769B (YoY +0.40%; QoQ -18.60%). EPS (GAAP): USD 1.58; Diluted EPS: USD 1.54. Gross Margin: 50.98%; Operating Margin: 23.05%; Net Margin: 19.06%. Effective Tax Rate: 18.6%. ROA: 3.06%; ROE: 7.21%; ROCE: 5.14%. DSO: 27.94 days; DIO: 68.70 days; CCC: 96.64 days; DPO: 134.73 days; CCC (cash conversion cycle): -38.09 days. Free Cash Flow: USD 2.846B; Operating Cash Flow: USD 3.705B. Cash at End of Period: USD 9.116B. Total Debt: USD 34.141B; Net Debt: USD 25.025B. Current Ratio: 0.713; Quick Ratio: 0.497; Cash Ratio: 0.266. Dividend Yield: 0.61%; P/E: 26.5x; P/S: 20.2x; EV/EBITDA: 76.3x.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
19.78B |
-2.07% |
-9.62% |
| Gross Profit |
10.08B |
-2.50% |
-12.06% |
| Operating Income |
4.56B |
2.20% |
-20.61% |
| Net Income |
3.77B |
0.40% |
-18.60% |
| EPS |
1.58 |
1.28% |
-18.56% |
Key Financial Ratios
operatingProfitMargin
23%
operatingCashFlowPerShare
$1.58
freeCashFlowPerShare
$1.21
dividendPayoutRatio
64.6%
Management Commentary
Theme: Strategy and Innovation - 'Integrated growth strategy' and 'investing in superiority, productivity, and organization' to deliver balanced top and bottom line growth. Theme: Market Conditions - management cites US/Europe volatility, inventory destocking, and consumer confidence pressures as near-term headwinds, while noting ongoing value of brand superiority and market leadership. Theme: Guidance and Outlook - management reiterates a two-to-three-year glide path with category growth returning to 3β4% in the mid-term; FY2025 organic sales growth guided to ~2% with Q4 0.5%β4.5% range. Theme: Tariffs and Cost Management - tariff headwinds estimated at USD 1β1.5B pre-tax for the year; mitigation via productivity, sourcing flexibility, and selective pricing. Notable quotes: 'On the top line, we now expect organic sales growth of approximately 2% for the fiscal year' (Andre Schulten); 'We will not cut to save the bottom line for a quarter only to lose momentum for the year' (Andre Schulten).
On the top line, we now expect organic sales growth of approximately 2% for the fiscal year.
β Andre Schulten
We will not cut to save the bottom line for a quarter only to lose momentum for the year.
β Andre Schulten
Forward Guidance
Management guidance centers on mid-to-long-term resilience: FY2025 organic sales growth ~2%; Q4 organic growth 0.5% to 4.5%; Core EPS USD 6.72β6.82 for the fiscal year; fourth-quarter core EPS USD 1.37β1.47. Commodity costs are forecast to be a headwind of USD ~200 million after tax; FX headwinds modest; Tariff impacts are a material offset, estimated USD 1.0β1.5 billion pre-tax for the year with USD 0.03β0.05 per share impact in Q4. The company targets adjusted free cash flow productivity of 90% for the year and plans to return USD 16β17 billion to shareholders (dividends ~USD 10B and buybacks USD 6β7B). The long-run view emphasizes continued innovation across all price tiers, productivity, and constructive disruption to sustain brand superiority. Investors should monitor: (1) trajectory of underlying market growth and share dynamics in the US/Europe; (2) tariff pass-through and pricing actions by region/brand; (3) progress on Tide/Cascade, SK-II, Olay, and other key growth platforms; and (4) evolving mix of channels (online, club, mass, and private label competition).