Procter & Gamble (PG) reported Q3 Fiscal 2025 results that reflect modest gains amid a persistently challenging macro environment. Net sales declined 2% year-over-year to $19.8 billion, though organic sales edged up 1%, demonstrating resilience in core business performance when excluding currency and M&A impacts. Diluted EPS rose 1% to $1.54, supported by operating efficiencies despite flat net earnings of $3.8 billion.

Segment performance was mixed. The Health Care segment stood out, with organic sales up 4% and net earnings climbing 8% to $569 million, driven by strength in Personal Health Care. Grooming also delivered solid gains with organic growth of 3% and a 6% increase in net earnings to $321 million, supported by volume and pricing improvements in key regions. Meanwhile, Beauty and Fabric & Home Care saw flat or modest organic growth, but earnings softened, particularly in Beauty, where net earnings dropped 8% despite a 2% rise in organic sales. The Baby, Feminine & Family Care segment faced the steepest headwinds, with net earnings down 12% and organic sales slipping 1%.

Profitability metrics highlighted the benefits of cost discipline. Operating income rose 2% to $4.56 billion, while gross margin slipped slightly by 20 basis points to 51.0%, pressured by unfavorable mix and commodity costs. However, this was offset by 280 basis points of productivity savings, which helped lift the operating margin by 90 basis points to 23.0%. SG&A expenses as a percentage of sales improved significantly, down 120 basis points, thanks to continued efficiency gains.

P&G maintained strong cash generation, posting $3.7 billion in operating cash flow and $2.85 billion in adjusted free cash flow, with 75% productivity. The company returned significant capital to shareholders, paying $2.4 billion in dividends—marking its 69th consecutive annual increase—and repurchasing $1.4 billion in shares during the quarter.

Looking ahead, the company revised its full-year organic sales growth outlook to approximately 2%, down from a prior range of 3–5%, reflecting macro softness and FX pressures. It continues to guide for flat all-in sales, core EPS growth of 2–4%, and a diluted EPS increase of 6–8%. Despite near-term headwinds, CEO Jon Moeller emphasized confidence in P&G’s long-term strategy, underpinned by a focus on product superiority, productivity, and agile execution.

In summary, P&G delivered stable results in a volatile environment, buoyed by strategic cost management and targeted innovation. While some categories showed value share erosion, notably in Beauty and Grooming, others like Health Care and Personal Care made gains. The company remains committed to its financial priorities and long-term growth trajectory.