Beauty leads P&G Q1 FY2027 growth, driven by skin and hair care
Key takeaways
- P&G’s Beauty segment grew net sales 6% to US$4.41 billion, the fastest of its five segments.
- Hair care, skin care, and personal care each grew by mid-single digits.
- Beauty net earnings slipped 1%, while higher commodity costs reduced the group’s gross margin.
Procter & Gamble (P&G) has reported net sales of US$23.3 billion for the first quarter of its fiscal year 2027 (July to September 2026), up 4% year-on-year. Organic sales, which exclude foreign exchange and acquisitions and divestitures, also grew 4%.
P&G’s Beauty segment led the group’s top-line growth in the first quarter of fiscal 2027, although higher commodity costs weighed on margins across the business.
The Beauty segment posted the strongest net sales growth of P&G’s five segments. It rose 6% to US$4.41 billion, with organic sales up 5%.
Despite the sales gains, Beauty’s net earnings fell 1% to US$868 million, while earnings before tax rose 1%. The results point to steady consumer demand for P&G’s beauty products, including premium skin care, but profit growth in the segment is lagging behind sales.
Across the group, P&G said higher commodity costs and product reinvestments reduced gross margin by 160 basis points.
Beauty category breakdown
In the beauty segment, Hair care grew by mid-single digits, driven by innovation-based pricing in North America and Latin America, a favorable product mix, and higher unit volumes.
Personal Care also grew by mid-single digits on volume gains in Greater China and Europe. They were partly offset by trade investments.
Premium skin care lifts P&G’s beauty sales.
Meanwhile, Skin Care organic sales increased by mid-single digits due to a stronger premium product mix and higher volumes in North America.
Grooming and Oral Care
In Grooming, net sales rose 4% to US$1.89 billion, and organic sales increased 5%. This was said to be supported by innovation-based pricing, mainly in North America and IMETA (India, the Middle East, and Africa).
In Health Care, Oral Care organic sales grew by low single digits as premium mix and pricing offset a decline in unit volumes.
Volume growth in Home and Fabric Care
Fabric and Home Care organic sales increased 5% year-on-year. Both segments driven by volume increases in North America and Europe.
Fabric Care growth was also attributed to a favorable geographic mix, and Home Care to a favorable product mix.
Baby and Feminine Care grow
The Baby, Feminine, and Family Care segment’s organic sales increased 3% versus a year ago.
Baby Care organic sales increased mid-single digits, driven by a unit volume increase, primarily in Greater China and North America, and a favorable premium product mix. This was also partially offset by lower pricing, primarily in North America.
Feminine Care organic sales increased in low single digits, driven by favorable product mix and innovation-based pricing, primarily in North America. This was partially offset by a unit volume decline in Europe.
Family Care organic sales increased in low single digits, driven by a unit volume increase, partially offset by merchandising investments. 
Hair Care helped P&G’s financial results.
Margin pressure and outlook
Group diluted earnings per share (EPS) rose 1% to US$1.97. Core EPS was also up 1% at US$2.00. Reported gross margin fell 160 basis points, mainly due to higher commodity costs and product reinvestments, which together accounted for 280 basis points of pressure before productivity savings.
“Our solid sales, earnings, and cash results in the first quarter reflect sharpened execution of our integrated strategy,” says Shailesh Jejurikar, chairman of the Board, president, and CEO of P&G.
“While we expect there will continue to be geopolitical and economic challenges, this strong start keeps us on track to deliver within our guidance ranges for organic sales growth, core EPS growth, and free cash flow productivity for the fiscal year.”
P&G raised its fiscal 2027 all-in sales growth guidance to a range of 2% to 4% to reflect its acquisition of Thorne, effective October 1, 2026. The company maintained its forecast for organic sales growth of 1% to 3% and core EPS growth of between flat and 3%, equal to US$6.89 to US$7.11 per share.
P&G now expects a commodity cost headwind of about US$1.4 billion after tax for the fiscal year, driven by higher costs for raw materials, energy, and transportation. It also expects after-tax headwinds of US$300 million from higher net interest expense, US$150 million from lower non-operating income, and US$50 million from unfavorable exchange rates. Combined, these equate to a headwind of US$0.79 per share for fiscal 2027, or an 11% drag on core EPS growth.
