Procter & Gamble earnings show that tariffs are hitting even the basics

Tide. Duracell. Pantene. Pampers. Cascade. Charmin. Pepto-Bismol. Old Spice. All are brands and properties falling under Procter & Gamble $PG’s umbrella, and they’ve helped to lift the company’s stock more than 10,000% since the 1980s.

But in more recent times, the vaunted conglomerate has struggled to attract the right kind of market attention. While the stock remains on most dividend investors’ radar, its investable star has faded slightly.

Procter & Gamble’s most recent quarterly earnings, released Thursday, are unlikely to meaningful change that status — unless the market starts pricing stability differently. Given the geopolitical picture, it would be far from shocking to see at least some retail and institutional investors seeking such a port amid the storm. But even here, in the laundry aisle and the shampoo aisle, the geopolitical picture intrudes, with tariffs and layoffs forming part of the story.

Here's what to know.

The business backdrop

Over the past decade, P&G has deliberately narrowed its focus, ditching food and smaller brands to double down on a tight portfolio of everyday essentials. The strategy — investing in fewer, bigger brands and seeking to improve their performance rather than chasing expansion — helped P&G outperform rivals like Unilever and ride the demand waves of the pandemic and beyond.

At the same time, it means growth now depends less on innovation-led volume gains and more on pricing, mix, and cost control. In a tightening consumer environment, that tradeoff can’t help but become more visible. What’s more, tariffs are really starting to eat into margins — no matter the White House’s story about who pays for them.

Details of a steady but no-growth quarter

For the quarter ending Dec. 31, P&G brought in $22.2 billion in quarterly sales, up a slight 1% from last year. Organic sales went nowhere, however: A 1% bump from higher prices was completely wiped out by a 1% drop in how much people actually bought.

The translation? Consumers are still buying the basics, just less of them.

The volume weakness hit pretty much everywhere. Baby, Feminine, and Family Care saw organic sales fall 4%, while Grooming and Fabric & Home Care were flat. Health Care and Beauty held up better, helped by premium products and pricing.

The pattern backs up other typical K-shaped economy behavioral observations that consumer-facing companies have been discussing across earnings calls and releases for several quarters now.

$400 million in tariff costs for fiscal 2026

Margins are where things are getting tighter — and tougher. Tariffs alone dragged margins down by 60 basis points, and P&G now expects about $400 million in after-tax tariff costs for fiscal 2026. That means tariffs are a real problem for the conglomerate, one that P&G can't just price its way out of anymore without losing even more volume. It's your proverbial rock and a hard place.

Perhaps unsurprisingly, P&G earnings portray the same pattern. Diluted earnings per share dropped 5%, mostly because of restructuring costs. Core EPS — which excludes those charges—stayed flat at $1.88. The company kept its full-year guidance unchanged for organic sales growth, core earnings, and cash returns, suggesting executives are confident things won't get worse. But they're not expecting any major breakthroughs either. What gains those restructuring costs may one day deliver aren’t coming into the picture just yet, even as longtime employees get shown the door.

In a world this uncertain, even the big guys are experiencing stability as a state of constant defense. That may not be new, but it’s rarely been so visible.