Procter & Gamble (P&G) shares surged more than 3% on Friday after the American consumer products leader announced fiscal third quarter profits that exceeded Wall Street projections. P&G cautioned regarding an approximate $1 billion after-tax impact on its fiscal 2027 earnings due to soaring oil costs, aligning with various international firms reporting major expenditure strains from the conflict.
The Pampers and Tide producer’s projected profit reduction ranks among the most significant outside the aviation industry, which depends extensively on petroleum. European competitor Nestle has cautioned about rising expenses stemming from the Strait of Hormuz closure, while Nivea-manufacturer Beiersdorf is weighing price increases later this year should raw material costs persist in rising.
The earnings hit for P&G’s fiscal period starting in July reflects the effect of oil prices surging from $60 per barrel prior to the hostilities to nearly $100 currently on plastic and paper packaging, plus shipping fees, the firm stated. P&G mentioned it was prepared to navigate these obstacles, including several force majeure notices from direct vendors who could no longer fulfill shipments.
“The noise, I would call it, from the commodity exposure is significant, as a billion dollars after tax is nothing to sneeze at from a headwind standpoint,” said P&G finance chief Andre Schulten on a post-earnings call.
“We have a lot of work to do, to work through the supply chain side and the cost side.”
P&G stock
At 1:02 p.m. EDT, Procter & Gamble shares rose 3.20%, or $4.63, at $149.25 in New York. The shares had appreciated roughly 2% this year as of Thursday.
Q3 Earnings
P&G’s third quarter organic sales, which excludes factors like mergers and exchange rate shifts, grew 3% in the company’s third fiscal quarter ending March 31, beating even the most bullish analyst forecasts.
The manufacturer of Tide detergent and Herbal Essences shampoo also disclosed volume growth that exceeded projections during that timeframe. P&G has concentrated in recent months on creating upgraded versions and formulas of its lineup and promoting them as more efficient than rival offerings, a plan that seems to be succeeding. In a release, CEO noted the firm achieved “wide-ranging growth across segments” and is boosting capital expenditure.
P&G largely kept its guidance for the existing fiscal year ending in late June, yet now anticipates increased commodity expenses of roughly $150 million, after taxes. P&G, with a total cost of goods sold in 2025 reaching $40.85 billion, also noted a $150 million fourth-quarter impact due to commodity-related inflation, feedstock risks, and logistical hurdles from the Middle East crisis.
“Inflation across nutrition, fuel, medical care, and numerous other expenditure sectors has impacted households and their perception of value. Recent global tensions have raised this to a fresh tier of anxiety,” Schulten remarked. P&G anticipates fiscal 2026 earnings per share will land at the bottom of its 0% to 4% growth target.
“We’re increasing investments to accelerate momentum with consumers despite the challenging geopolitical and economic environment,” said Shailesh Jejurikar.