Procter & Gamble raised its fiscal 2027 estimate for the after-tax earnings impact of commodity costs to about $1.4 billion, citing higher prices for materials, energy and transportation. The increase adds to pressure on margins even as the consumer-products company reported quarterly sales growth.
The new estimate compares with about $1 billion in P&G’s July outlook. The company did not say how much of the projected impact is tied specifically to oil. Its other expected pressures are $300 million after tax from higher net interest expense, $150 million from lower non-operating income and $50 million from unfavorable currency movements. Taken together, the four pressures are expected to shave $0.79 from fiscal 2027 core earnings per share and cut growth in that measure by 11%.
In the July-September 2026 quarter, net sales rose 4% year over year to $23.3 billion, while core earnings per share increased 1% to $2.00. Core operating margin contracted 80 basis points. Higher commodity costs reduced core gross margin by 140 basis points, partly offset by 120 basis points of gross productivity savings. P&G said core operating margin included 250 basis points of gross productivity savings.
Brent crude averaged $114 a barrel in September, $23 above August, according to the U.S. Energy Information Administration (EIA). The EIA linked the rise to attacks on oil infrastructure and tankers in the Middle East, and said tanker risks raised shipping costs and the oil-price risk premium. U.S. retail diesel averaged $6.29 a gallon that month. Those figures provide energy-market context, but P&G did not quantify the oil-related portion of its forecast.
P&G maintained its fiscal 2027 organic sales growth outlook at 1% to 3% and its core earnings forecast at $6.89 to $7.11 per share. Its all-in sales growth range is 2% to 4%, reflecting the Thorne acquisition as of Oct. 1. The company’s sales outlook update covered that change.
Reuters reported that higher fuel expenses are squeezing household budgets and may limit companies’ ability to pass added costs to consumers. It also cited driver shortages on some routes as another source of freight pressure for packaged-goods companies. P&G Chief Financial Officer Andre Schulten expects commodity cost pressure to intensify over the next two quarters, Reuters reported.
