On Friday, the Procter & Gamble Company reported its third-quarter results for fiscal year 2026, posting a 7% increase in net sales compared to the same quarter a year prior. Those gains come despite higher crude oil prices due to the ongoing U.S.-Iran conflict. P&G CFO Andre Schulten estimated that the rising cost of oil could cost the personal care company $1.3 billion before tax, or $1 billion after tax.
“A billion dollars after tax is nothing to sneeze at from a headwind standpoint, and we have a lot of work to do to work through the supply chain side and the cost side,” said Schulten on Friday’s call.
While the company will not share its fiscal year 2027 outlook until July, Schulten was confident in P&G’s ability to navigate evolving supply chain and cost dynamics.
“I think you’ve seen us excel in that space. The last time we had to do this, coming out of Covid with the supply chain crisis, I think the team even further sharpened their skills in reformulation,” he said. “We further diversified our supply base. We further diversified our flexibility on our formulations, and we further sharpened our understanding of short-term productivity levers we can pull.”
P&G saw growth across its segments. Organic sales in its beauty segment grew 7% in Q3, while organic hair-care sales
rose in the mid-single digits. Schulten cited the high-end Japanese skin-care brand SK-II as delivering 18% growth in the quarter.
P&G, which owns brands like Olay, Ouai and Pantene, announced plans to cut jobs in June as part of a larger restructuring. Those cuts could affect as many as 7,000 jobs, or roughly 15% of its non-manufacturing workforce, by mid-2027.
“We’re on track to deliver 15% non-manufacturing headcount reduction over two years, with a significant portion of that being delivered this fiscal year. By the end of this fiscal year, … our objective really is to enable our organization to be closer to the consumer and be more empowered than they are even today,” Schulten said of the restructuring. “We want smaller teams that are empowered to make decisions, that have the data to make those decisions without a lot of legwork, and that are freed of internal work processes and legwork that they otherwise would have to do.”
In July, P&G announced plans to raise prices due to tariff costs. However, Schulten expressed confidence in the company’s ability to maintain consumer loyalty even with rising prices.
“I don’t think we’ve lost pricing power. I think pricing power has to be earned, and the way to earn pricing power is to combine pricing with a truly delightful experience for the consumer. And if we do that, and we’re honest with ourselves, instead of just assuming we can take a straight 5% price increase across everything, I think it’ll work,” he said. “So that’s the job at hand for the team.”
Schulten said that P&G is following the guidance from the administration to apply for tariff refunds. But how much the company will be able to recoup in tariffs costs remains to be seen.
“Once that process is clear, defined and accessible, we will follow it,” he said. “We have about $150 million after tax in refunds available from the IEEPA tariff. How much of that is recoverable or not? We’ll find out.”
