Exacerbated by the government shutdown and temporary suspension of federal food assistance in an already challenged economic environment, Procter & Gamble (PG) anticipates a significant drop in U.S. sales in the current quarter.
Sales were down “both in volume and in value significantly in October..and are not expected to be materially different in November,” Procter & Gamble CFO Andre Schulten said at the Morgan Stanley Global Consumer & Retail Conference Tuesday.
“We knew the consumer was more nervous and cautious…we knew there was a stronger competitive environment. But the context in the U.S. is more volatile, probably the most volatile we’ve seen in a long time,” Schulten added.
While the company assumed this volatility in its FY26 guidance, the downbeat outlook will play out primarily in the fiscal second quarter.
“For the year, we feel very comfortable with the guidance range we’ve provided,” Schulten said.
The consumer products company expects core FY26 earnings to be in-line to up 4% versus FY25, translating into a range of $6.83 to $7.09 per share versus $6.97 estimates.
When asked about the company’s restructuring efforts, Schulten said the main goal is creating savings that can flow back into growth investments, rather than EPS gains.
“We need to be able to deliver the EPS outcome from our core business and our underlying business growth,” he said.
As part of this new organizational structure is the expectation to eliminate staff. With 9 members per team, Schulten believes the company needs only 3 or 4 members to run these business teams by employing AI tools.
“We don’t have to have people who put data sheets together. That can happen in a very automated way. Analysis can happen and AI-enables – so that’s the enabling mechanism,” Schulten remarked.
Shares came under pressure as a result of Schulten’s remarks on the U.S. sales outlook, falling 3% and dragging down Unilever PLC (UL) and Colgate-Palmolive (CL) in sympathy.