Procter & Gamble Faces Challenges as Consumers Scale Back Laundry Habits Amid Tariff Pressures

Procter & Gamble (P&G), the maker of Tide laundry detergent, is feeling the pressure from ongoing economic headwinds, particularly from tariffs, which are impacting consumer behavior and company performance. On Thursday, P&G reduced its full-year sales and earnings per share (EPS) forecasts, citing uncertain costs and the growing financial strain on consumers.

In an interview with Yahoo Finance, P&G CEO Jon Moeller revealed that while consumers aren’t necessarily switching to cheaper alternatives, they are adjusting their behaviors to save money. One significant change is a reduction in laundry loads, with many households choosing to do less laundry each week in order to conserve detergent.

“We expect uncertainty to continue,” Moeller stated, acknowledging the difficult economic environment. P&G’s latest quarterly results fell short of expectations for both net sales and organic sales growth, with shares of the company dropping 2.4% in pre-market trading.

Impact of Tariffs and Consumer Behavior on P&G’s Sales

P&G joins a list of consumer goods giants that are grappling with the effects of rising tariffs and inflation. Earlier in the day, PepsiCo also revised its full-year profit outlook, citing similar economic pressures. Analysts, including Jefferies’ Kaumil Gajrawala, have warned that the consumer packaged goods sector may face a rough first quarter, with subdued demand, retail de-stocking, and inflationary expectations leading to weaker-than-expected results.

Quarterly Earnings Results: Mixed Performance Across Segments

For the latest quarter, P&G reported net sales of $19.8 billion, a 2% decline from the prior year, missing the expected $20.22 billion. Organic sales growth was just 1%, below the anticipated 2.53%. Despite the challenges, some segments performed better than expected:

• Beauty: Organic revenue growth of +2%, surpassing the +1.62% estimate.

• Grooming: Organic revenue growth of +3%, exceeding the +1.59% estimate.

• Healthcare: Organic revenue growth of +4%, slightly above the +3.99% estimate.

• Fabric & Home Care: Flat organic growth, missing the +2.7% estimate.

• Baby, Feminine, & Family Care: A decline of -1%, far below the +2.82% estimate.

P&G also reported a gross margin of 51.2%, slightly lower than the expected 51.5%. Adjusted EPS of $1.54 marked a 1% increase from the previous year, just above the estimated $1.53.

Full-Year Outlook Adjusted

Due to the ongoing challenges, P&G revised its full-year guidance:

• Organic sales growth is now expected to be +2%, down from the previous forecast of +3% to +5%.

• Full-year EPS is now projected to be between $6.72 and $6.82, down from the prior estimate of $6.91 to $7.05.

As P&G continues to navigate these challenging conditions, the company’s focus remains on adapting to shifting consumer habits and managing the impact of inflation and tariffs on its operations.