Beauty drives financial growth for Procter & Gamble

Procter & Gamble (P&G)reported net sales of US$22.2 billion in Q2 of fiscal year 2026, recording a 1% increase from the previous year. When excluding the impacts of foreign exchange, acquisitions, and divestments — looking at organic sales — P&G reported unchanged numbers.

Despite flat overall organic sales, the company reported 4% organic sales growth in the beauty department compared with the previous year.

Hair Care and Personal Care organic sales grew by mid-single digits. The company attributes the rise to innovation-led volume growth, partially offset by unfavorable geographic mix outcomes. 

Skin Care organic sales grew by low single digits, driven by a mix of premium products and pricing, particularly in Greater China. However, volume declines partially offset Q2 growth in the Skin Care segment.

In other departments, the Grooming/Fabric and Home Care segments’ organic sales were both unchanged. P&G says Grooming’s outcome was driven by innovation-based pricing, offset by volume declines. 

Fabric Care organic sales remained flat, as increased numbers in North America and Latin America were neutralized by a decline in volume in Europe and an unfavorable product mix.

The Baby, Feminine, and Family Care segment’s organic sales decreased 4%. However, P&G says increases in the Beauty and Health Care segments offset the loss. Baby and Feminine Care organic growth decreased primarily due to a unit-volume decline. Meanwhile, Family Care decreased by double digits, driven by strong volume growth in the previous fiscal year.

Health Care reported a 3% sales increase versus the previous year, driven by a favorable premium product mix in Oral Care organic sales and an organic sales increase in Personal Health Care of low single digits, driven by higher pricing. The company reports that volume declines partially offset Oral Care, while Personal Health Care was partially offset by unfavorable product mix.

Diluted net earnings per share (EPS) fell by 5% compared to the previous year, reaching US$1.78. P&G attributes the decrease to higher restructuring charges. Core earnings per share remained at US$1.88, while currency-neutral core EPS declined by 2%, totaling US$1.85.

FY26 anticipations

Beauty and Health Segments Boost P&G’s Q2 financial results.

P&G is forecasting between 1–5% all-in sales growth for FY26 and anticipates organic sales growth between flat and 4%. Looking at the Q4 report, it expects EPS to grow between 1% and 6%, adjusted for higher restructuring costs. 

The company’s core EPS growth outlook remains flat to 4%. This translates to an EPS range of roughly US$6.83 to US$7.09 with a midpoint approximating US$6.96.

P&G still expects to convert 85–90% of its earnings into cash flow and anticipates capital spending equal to 4–5% of sales with significant shareholder returns. The company expects to pay around US$10 billion in dividends and repurchase about US$5 billion in shares in FY2026.

The company lists potential economic volatility and its ability to successfully manage uncertainties arising from changing political and geopolitical factors — such as exchange rate fluctuations, tariffs, and boycotts — as risks to its delivery on FY26 projections.

Beauty financials 

Other personal care companies have been bolstered by their financial performance in the beauty sector.

THG Beauty’s Q4 numbers outperformed its predictions earlier this month with its strongest performance since 2021. The company predicted that same-day delivery, AI-led personalization, and renewed investments in its own brands will continue to reinforce customer engagement in 2026.

This week, Essity proposed a 6% dividend increase following its organic sales growth. Despite Essity’s Q4 net sales dropping by 8.2% and full-year net sales dropping by 4.8%, its EBITA margin improved, and organic sales remained in the positive range. It also launched a cost-savings program with an intended US$111 million in savings.

Additionally, Ulta outperformed its Q3 expectations with sales up by approximately 5%. It subsequently raised its full-year sales and profit forecast. Ulta credited its growth to stronger comparable sales, ongoing expansion, and a heightened emphasis on K-beauty brands.