Dow Jones and S&P 500 Slip as P&G Forecast Cut Raises Demand Concerns

P&G Trims Forecast as Sales Miss and Trade Headwinds Weigh on Consumer Demand

Procter & Gamble shares dipped 3% after the company posted weaker-than-expected quarterly revenue and lowered its full-year earnings and sales guidance. The consumer goods heavyweight, which owns household staples like Tide detergent and Charmin toilet paper, is grappling with softer demand and broader macroeconomic pressures tied to trade policy and inflation-strained consumers.

In the pre-market session at 11:37 GMT, Procter & Gamble Co is trading $163.25, down $2.48 or 1.50%.

How did P&G perform this quarter?

The company reported fiscal third-quarter earnings of $1.54 per share, slightly topping analyst expectations of $1.53. However, net sales came in at $19.78 billion, missing Wall Street’s $20.11 billion forecast and marking a 2% year-over-year decline. While net income rose slightly to $3.77 billion, volumes slipped by 1% as consumer spending slowed, particularly in the U.S. during February and March.

What’s pressuring demand for consumer staples?

P&G cited weaker consumer confidence and budget-conscious shopping behavior, especially as private label competition intensifies at retailers like Walmart and Target. The ongoing trade conflict, with tariffs impacting raw materials and exports, has added cost uncertainty. Although 90% of P&G’s U.S. sales are domestically produced, tariff exposure on inputs and exports to Canada remains a concern. Competitors such as Kimberly-Clark and Reckitt have also cut forecasts, underscoring broader challenges in the consumer staples sector.

What’s behind the guidance cut?

P&G now expects fiscal-year core earnings per share between $6.72 and $6.82, lowered from the previous range of $6.91 to $7.05. The company also abandoned its prior 2% to 4% annual sales growth target, projecting flat revenue for the year. Price increases have slowed to 1% this quarter, reflecting management’s stated intent to reduce reliance on price hikes for growth. However, this shift has yet to reverse the volume downturn.

What should traders watch going forward?

With global supply chains still under pressure and demand tepid in key markets like China, traders should monitor P&G’s ability to manage costs and reinvigorate volume growth. Attention will be on upcoming macroeconomic data, tariff policy developments, and earnings from peers like Nestle and Unilever for broader sector signals. Until visibility improves, P&G’s premium pricing strategy may face continued resistance from value-focused consumers.

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