Brace yourself for pricier diapers.
On Tuesday, Procter & Gamble forecast a disappointing fiscal 2026 outlook, adding that the company would raise prices on some products to offset a large tariff hit.
The downbeat earnings report arrived the day after the company said its CEO, Jon Moeller, was vacating the role, with COO Shailesh Jejurikar taking over as CEO.
The household basics company, which is behind everything from Bounty paper towels to Pampers diapers, anticipated a $1 billion pretax hit because of higher costs from tariffs in its fiscal 2026 guidance.
P&G expects annual sales to grow between 1% and 5%, compared to the 3.09% growth LSEG analysts expected.
We can thank the elephant uncertainty in the room for that lower guidance. “There is a level of baseline uncertainty that we reflect in the guidance range,” Moeller said on a post-earnings call. “To the extent that people are frustrated with the lack of certainty, and the breadth of the range, trust me, there's no one more frustrated with that than I.”
P&G’s total tariff hit can be broken down to a $200 million impact from items imported from China, another $200 million from Canada, and $600 million from tariffs on goods in the rest of the world, according to CFO Andre Schulten.
He added that while the company has invested in US production, certain ingredients and materials will still have to be imported, per CNBC. While the company suggested that it’ll be able to balance some of the tariff hit with productivity changes, it will raise prices on approximately a quarter of its US products in the mid-single-digit range this quarter.
That might not be the end of the world for P&G. “We believe that customers will still pay up for these products,” Kim Forrest, chief investment officer at Bokeh Capital Partners, told Reuters. “During soft economic times, consumers may trade down but P&G has many products that people are willing to pay up for, regardless of tariffs or a slow economy.”
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