Updated version 1 - Procter & Gamble stated that rising commodity costs will have a greater impact on annual profits, but revenue exceeded expectations.

Stock price information has been added in paragraph 8.

Juveria Tabassum/Alexander Marrow

Reuters, October 22 - Procter & Gamble (PG.N) warned on Thursday that while demand for beauty and home care products boosted first-quarter sales past Wall Street expectations, rising commodity-related costs this year will still impact profits.

The maker of Pantene shampoo now anticipates that increases in material, energy, and transportation costs will reduce fiscal year 2027 profits by about $1.4 billion, up from the prior estimate of $1 billion.

Although Procter & Gamble (link) achieved 250 basis points of productivity savings through measures such as improved supply chain efficiency, core operating profit margin still fell by 80 basis points in the quarter ended September 30.

A company spokesperson told Reuters that higher fuel prices have driven up transport and freight costs for consumer companies, and shortages of truck drivers on certain routes have put further pressure on these costs.

U.S. retail diesel prices (link) — which continued to rise after the U.S. went to war with Iran — hit a record high of $6 per gallon in September and have remained elevated since.

The spokesperson said Procter & Gamble is investing in product innovation while negotiating with suppliers and optimizing transport routes to keep costs under control.

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However, according to data compiled by LSEG, the maker of Tide laundry detergent saw net sales for the first quarter grow by 4% to $23.28 billion, exceeding analysts’ forecast of $22.80 billion.

The company’s shares rose about 2% in premarket trading.

Demand for high-priced hair care products drove up its beauty division sales—even as rising fuel and food costs squeezed household budgets, consumers continued to spend on self-care.

In August, Procter & Gamble said it would acquire dietary supplement maker Thorne (link) to tap into rising demand for health and wellness products.

In the three months ended September, overall sales volumes grew by 2.4%, while prices rose by about 0.4%.

Swiss consumer goods manufacturer Nestlé NESN.S also reported better-than-expected organic sales growth on Thursday, thanks to higher sales volumes (link).

Procter & Gamble maintained its forecast for fiscal year 2027, expecting organic sales growth of 1% to 3% and core earnings per share of about $7.

Procter & Gamble reported core earnings per share of $2 for the first quarter, topping analysts’ expectations of $1.88.

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