Procter & Gamble, the world’s largest consumer goods company by market capitalization, delivered a mixed bag in its latest financial report, revealing both resilience and ongoing challenges in a volatile global market. On January 22, 2026, the company announced second-quarter results that, depending on where you look, either exceeded or missed expectations—a story that says as much about the state of the U.S. consumer as it does about P&G’s own strategic pivots.
For the quarter ending December 31, 2025, Procter & Gamble reported net sales of $22.21 billion, just shy of Wall Street’s anticipated $22.28 billion, according to data compiled by LSEG (Reuters). While that shortfall might seem minor, it reflects broader headwinds in the U.S. market, where consumer spending remains tepid and government disruptions have rippled through household budgets.
Yet, in a sign of operational strength, P&G’s adjusted earnings per share came in at $1.88, beating analyst estimates of $1.86. As reported by Reuters, this outperformance on the bottom line was largely thanks to robust demand for high-end beauty and hair care products—a bright spot in an otherwise subdued sales environment.
"The company is on track to meet its annual goals despite a difficult geopolitical and consumer environment," CEO Shailesh Jejurikar stated on January 22, 2026, reflecting cautious optimism in his first month at the helm. Jejurikar, who assumed the chief executive role on January 1, 2026, faces a delicate balancing act as the company navigates slowing growth at home and seeks new opportunities abroad.
One of the most significant drags on performance this quarter was the U.S. market, P&G’s largest. The company saw sales volumes decline in three out of five major product categories in the United States—a trend attributed to a combination of higher prices, cost-conscious consumers, and the lingering effects of the government shutdown in October and November 2025. The shutdown delayed food aid payments, squeezing low-income households already grappling with elevated prices and a lukewarm job market (Reuters).
Andre Schulten, P&G’s chief financial officer, explained during an analyst call that “sales had declined in all categories in the United States due to the shutdown.” This sentiment was echoed by industry observers. Brian Mulberry, a senior portfolio manager at Zacks Investment Management, summed up the consumer mood: “The consumer is making cost-driven choices for items like laundry detergent or bleach, but they aren’t desperate enough to switch to generic alternatives for products that help them look and feel better.”
Indeed, the beauty segment was the lone standout, with volumes rising 3%—a performance that now represents about 18% of P&G’s total sales. Consumers, it seems, continue to prioritize self-care even as they pinch pennies elsewhere. This trend helped offset weaknesses in staples like detergents and toilet paper, categories more vulnerable to belt-tightening.
The company’s gross margin, however, continued to slide for the fifth consecutive quarter. This pressure stemmed partly from tariffs—especially those imposed by former President Donald Trump on imported goods—and partly from investments in packaging innovation. P&G has been experimenting with different packaging sizes to appeal to shoppers hunting for value, but these investments haven’t come cheap.
To help counteract the impact of tariffs and rising costs, P&G raised prices by about 1% across all categories during the quarter. The company also noted that it had revised its estimate of tariff-related cost increases downward, from an initial $1 billion to $1.5 billion at the start of last year to roughly $400 million by October 2025, maintaining that figure in its January update. As noted by Reuters, these price hikes and cost controls have been critical in supporting earnings, even as they risk further dampening demand among price-sensitive consumers.
Internationally, P&G found more reasons to be cheerful. The company’s second-largest market, China, delivered double-digit growth in baby care products, buoyed by the introduction of new premium "silk enhanced diapers." This innovation-driven surge provided a welcome counterbalance to the soft U.S. numbers and underscored the importance of emerging markets to P&G’s future growth.
Despite these pockets of strength, the company’s net quarterly profit attributable to shareholders fell about 7%, landing at $4.32 billion. The decline reflects both the higher restructuring charges P&G is absorbing and the broader profitability pressures facing consumer goods giants worldwide.
In light of these dynamics, P&G adjusted its outlook for the rest of the fiscal year. The company lowered its annual net earnings per share growth target to between 1% and 6%, down from the previous range of 3% to 9%. The revision, as the company explained, was primarily due to increased restructuring charges—an acknowledgment that the path to renewed growth may require further belt-tightening and strategic realignment.
Still, not everything was gloomy on Wall Street. P&G’s stock price told its own story, initially dipping by about 2% in pre-market trading on January 22, 2026, only to rebound and close up 2% as investors digested the company’s resilience in the face of adversity. David Wagner, head of equities and portfolio manager at Aptus Capital Advisors, explained the market’s reaction: “I think the market can look past the drop in organic sales, since sentiment was already quite low before the report, with management having played down expectations during the quarter.”
Looking ahead, P&G’s leadership is keenly aware of the need to reignite growth in its home market. “We need to restart growth in the United States,” Schulten said on the analyst call, signaling that the company won’t rest on its laurels. At the same time, the company is banking on continued momentum in international markets and further innovation in high-margin segments like beauty and baby care.
For now, the company is sticking to its annual profit and sales forecasts, betting that its global footprint, pricing power, and product innovation will help it weather the storm. But, as recent quarters have shown, the world’s largest consumer goods company isn’t immune to the shifting tides of consumer sentiment, policy shocks, or the relentless search for value among shoppers.
As the year unfolds, all eyes will be on how P&G’s strategies play out—whether its premium bets and cost discipline can offset the drag of a cautious U.S. consumer and whether new leadership can steer the company into its next phase of growth. One thing is certain: in the world of consumer staples, even the smallest shifts in shopper behavior can make waves.