Procter & Gamble Co Q3 2025 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Lauren Lieberman - Barclays Investment Bank - Analyst : So Andre, during the quarter, you guys had definitely discussed the retail inventory destocking in the US and then that kind of more to more of a real slowdown in consumer takeaway. And you'd also flagged similarly changing behavior in Europe. US consumer confidence metrics are very weak. Europe, to a lesser degree, but still below consensus forecast. So just with that context, I would love to get your read on consumer behavior in these regions. And kind of what are you planning to do differently? I know you talked about all the innovation, but to support revenue growth and market share is things that feel like we're probably going to get worse from here from a market growth standpoint.

Question: Bryan Spillane - Bank of America - Analyst : Andre, I guess I had a question just around how we're -- how we should begin thinking about approaching modeling, forecasting for '26. And so maybe can you give us a little bit of perspective on one, just category growth rates now and as we're kind of thinking about exit rates in the '26. And then as we're looking at this year as a base, so fiscal '25 as a base, how much more incremental -- how many more incremental levers are there to pull as we look at next year in terms of either offsetting the incremental cost of tariffs or if demand begins to be subdued? So just trying to understand from you, just what are some of the factors you're looking at and that we should consider as we begin to kind of look at our model out past the end of fiscal '25?

Question: Stephen Powers - Deutsche Bank - Analyst : So Andre, you talked about the innovation pipeline strength and the importance of maintaining the momentum on that front. I haven't parsed through all of the math implied in the updated guidance, but could you just talk about whether kind of net of everything, the level of investment that you're putting behind that innovation and behind demand building going forward has changed at all in this updated outlook. And then whether or not the magnitude has given what you're seeing in the consumer, has the nature of that investment changed at all in terms of advertising versus trade or the like? Just how you're thinking about the support that you're going to put behind that innovation as you go forward?

Question: Dara Mohsenian - Morgan Stanley - Analyst : So Ander, you highlighted doubling down on superiority and innovation in this environment. It's obviously served P&G well in recent years. with the consumer pressure points we're seeing, if we do start to see more consumer trade down, can you discuss how you see P&G is positioned today versus past cycles? And then also, have you seen any specific geographies or product categories where private label shares picked up so far? And you touched on this earlier, but what's P&G's market share performance been in some of those areas if, in fact, you're starting to see that dynamic play out a little more?

Question: Filippo Falorni - Citi - Analyst : I wanted to ask a broader question around brand sentiment towards American brands around the world. Are you seeing any signs other than the Middle East, where I know it's been a pressure point for you guys for quite a few quarters of some anti-American brand sentiment around the world. And specifically on China, we're seeing some improvement there. Obviously, SK-II back to growth, as you mentioned. Do you see some risk on the other side of the China business, particularly the OA and the air care business potentially going forward? And maybe just some expectation on the growth forward in China.

Question: Christopher Carey - Wells Fargo - Analyst : I just wanted to follow up on one area and then ask a broader question. But regarding Andre, your response, I believe, to Bryan's question and you're not giving fiscal '26 guidance today before we get that. But the glide path back to category growth rates, I think you had said something like over the next two to three years, does that imply that you'd be a bit below historical category growth rates for the foreseen future, including into fiscal '26? Or was there an expectation that category growth would perhaps return to those levels into fiscal ['26] with a bit more pricing? I fully realize that there's no crystal ball, but it was kind of this question to terrify the very near term versus the medium term. And if I could, your Investor Day was very much focused on opportunities in North America and in Europe. And coincidentally, those are the areas where category growth has slowed. And so are you thinking about adjusting your playbook at all in light of category development? Or is it still very much aligned with the strategy from a geographic standpoint that you laid out at Investor Day?

Question: Peter Grom - UBS - Analyst : So I was hoping to get some more perspective on international market growth. You touched on the Europe focus markets being up 1%. You outlined the impact France is having Latin America up 6% despite challenges in Mexico. So just want to be curious if you could unpack category growth in those regions versus maybe market share performance? And then you outlined some of the shifts in consumption that are happening in Europe, in your response to Lauren's question. I'd be curious what you're seeing in terms of consumption across Latin America more broadly.

Question: Bonnie Herzog - Goldman Sachs - Analyst : All right. I just had a quick question on guidance. Based on your update, it still implies an acceleration in Q4 versus Q3 and then just thinking about that in the context of softer consumption trends, just wondering if there could be further risk there or just maybe what gives you the confidence that things might accelerate a bit in Q4 versus Q3. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 24, 2025 / 12:30PM, PG.N - Q3 2025 Procter & Gamble Co Earnings Call

Question: Mark Astrachan - Stifel Financial Corp. - Analyst : I wanted to go back to your commentary, Andre, about the shifting consumer in terms of where they're purchasing. You called out [club], you called out more mass channel. I don't think that's especially new. But I guess are you seeing acceleration in the most recent quarters is sort of one? And then two, if not directionally new, meaning that the consumer has been shifting to Walmart or Costco or club channels. In general, does that change the way that the company approaches selling into those channels from a price pack or volume versus price mix standpoint. Has that evolved over the last couple of years? And how do you see it kind of changing from here, especially in the context of what you called out more recently.

Question: Andrea Teixeira - JPMorgan - Analyst : So Andrea, first a clarification on the $1 billion -- $1.5 billion impact that you included from tariffs. Is that -- I'm assuming obviously that's an annualized impact and most related to side to raw material sourcing from that 10% that you talked about exposure to China in some of the exports of Canada that you alluded to. Is there any -- like when we think about then if that's correct, the real question that I have is that at the midpoint of that impact let's say, [1.25]. That would be around 3% of annual costs and pricing needed to offset that would be broadly 1 or 2 points. And as you said, you're going to use productivity as you always had leaned into productivity to offset other inflationary costs in the past. So it doesn't not seem hard to mitigate that from a value accretive. Also value accretive innovation that you have -- so how we should be thinking more long term or medium term, the mitigation efforts that you're going to have understandably not in the Q4 fiscal but going to the medium term?

Question: Olivia Tong - Raymond James - Analyst : My question is also around the pretax tariff impact. So the $1 billion to $1.5 billion. And if you could just compare contrast to the [$160 million, $170 million] in Q4? Was there some forward buying or other factors that are resulting in a smaller impact in Q4 versus your anticipated full year run rate? And then just following up on that, I wanted to know a little bit more in terms of the pricing plans to mitigate the tariff impact because the categories that sound like they're hardest hit, for example, like tissue towel, are categories that have seen a more substantial deceleration and typically have significantly higher private label exposure and competition overall. So as you -- as the team do their work in terms of trying to figure out how to go about pricing. If you could just talk in terms of the specifics around categories that would be great.

Question: Robert Ottenstein - Evercore ISI - Analyst : A couple of follow-ups. First, in the press release, I believe you stated that in China, you were taking pricing in skin care. So I'd like to understand a little bit the logic behind that given that it's a tough market. and what gives you the confidence to get that price? And is it, in fact, sort of strategic pricing that you need to be higher to get the high-end consumer interest? So that's first. And then second, love to understand a little bit more about how -- from your perspective, the major retailers are thinking about what's going on with significant changes in trade policy, how they're thinking about their suppliers in that context, their suppliers, supply chains? Are -- is there any indication that they are looking to change who they're working with, given various people's supply chains? And are they looking at private label differently? You had mentioned that private label continues to be flat or trending down, is that because the consumer, for whatever reason, doesn't want private label because the brands are marketing so well and the value is so strong? Or are the retailers, at least in your categories, deemphasizing private label? And what's the logic behind that? And maybe in that context, touching on diapers. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 24, 2025 / 12:30PM, PG.N - Q3 2025 Procter & Gamble Co Earnings Call

Question: Kevin Grundy - BNP Paribas Securities Corp. - Analyst : Rookie mistake, sorry about that. Andre, question on enterprise markets here, which have slowed a bit. Can you just comment broadly -- and I know some of this is China, we've talked about the Middle East before. But what was really sort of a key growth driver for the company now has slowed pretty precipitously? Can you comment on industry growth rates in key enterprise markets? How much of this is slowing? How much of this is industry specific versus how much of this might be more Procter specific because we don't have a great deal of granularity on that? And then sort of more forward-looking as we think about fiscal '26, what is the company's sort of expectation, broadly speaking, in terms of growth rates for enterprise markets? So any color there would be helpful.

Question: Kaumil Gajrawala - Jefferies - Analyst : I guess a couple of things. There's so much conversation about macro. But if I recall, the innovation pipeline was so much heavier in the back half than the front half of this year. So is -- with everything that's going on in whether it's macro or tariffs that sort of thing, is it slowing your -- the post of innovation rollouts or expectations from contribution of those innovations? And I suppose I see that in the context of sometimes when the consumer is under pressure, they tend to not want to try new things. And I'm just wondering if that sort of changes the calculus on your plans for rollouts.

Question: Robert Moskow - TD Cowen - Analyst : Andre, I wanted a little more clarity on the commodity inflation guidance. It stayed the same at $200 million. Is that including the tariff impact or not? I think that's the first question. And then also, we've noticed that resin prices are down a lot since the start of the year, probably in the mid-teens related to crude oil. Is it possible as you head into fiscal '26 that there actually is this crude oil benefit that flows through and helps reduce the cost of the tariffs that hit your P&L? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 24, 2025 / 12:30PM, PG.N - Q3 2025 Procter & Gamble Co Earnings Call

Question: Korinne Wolfmeyer - Piper Sandler - Analyst : Just wanted to touch a little bit on how you feel about the broader agility of your supply chain? And how quickly and easily could you shift things around to try and mitigate the impacts here in the more of the near term? And then also, can you just touch a little bit on what your conversations with both your suppliers and also maybe the retail partners have been on the potential to kind of help absorb those tariff costs? Any context there would be great.