Procter & Gamble Project is a billion-dollar hit from Trump’s tariffs
Procter & Gamble warns of an additional $1 billion incurred by President Trump’s tariffs. (Scripps News)
Scripps News
- Procter & Gamble reported annual profit of $16 billion with revenues of $84.3 billion, but organic sales growth was the slowest in seven years.
- The company plans to raise the price of North American products by 25% due to the impact of tariffs and product innovations.
- P&G has been restructured and plans include job cuts and product offerings in specific markets.
- The duties are expected to cost P&G an additional $1 billion in fiscal year 2026.
Procter & Gamble reported the poorest increase in sales since 2018, skimming details of the restructuring plan, and disclosed that it would raise prices in a quarter of North American products, partly due to a recurring trade war by President Donald Trump.
The Tide Laundry Detergent and Pampers diaper manufacturer reported $16 billion in profits with revenue of $84.3 billion. In the fourth quarter, profits were $20.9 billion with sales of $3.6 billion, breaking Wall Street forecasts. Organic sales in recent years (excluding impacts from foreign exchange, acquisitions and divestitures) were the worst in seven years.
The first report did not provide promised new details of P&G’s newly announced restructuring plans. During a July 29 conference call with Wall Street analysts, CEO John Mohler said P&G is still working on a restructuring but has mentioned some details.
“It takes time to plan out these moves… so we can’t discuss all the details of today,” Moeller told analysts.
Customs duties will cost the company $1 billion additional
The Cincinnati-based consumer products giant said in June that it would update its plans to cut 7,000 jobs as part of a restructuring move when it reported its financial results. Change happens as consumers struggle with economic uncertainty, political instability and the trade war launched by Trump this year, and the company struggles to maintain growth.
P&G said tariffs on its products and the raw materials used within it would spend an additional $1 billion on the company in fiscal year 2026. Andre Schulten’s chief financial officer said much of its impact was concentrated in North America between major materials imported from around the world and products exported to Canada.
To offset that, Schulten said 25% of its products will see a “single-digit mid-term” price rise in the ongoing trade dispute, due to tariffs and due to product innovation payments.
“This isn’t very different from what we normally take with innovation. It’s a few points high to explain the impact of tariffs that cannot be offset by productivity,” Schulten said.
P&G is expected to see organic sales growth of next year from 0% to 4%.
P&G to acquire a new CEO
Meanwhile, on July 28th, P&G announced that 58-year-old Chief Operating Officer Shailesh Jejurikar will take over as CEO on January 1st, 2026.
P&G employs 108,000 worldwide, including 10,000 in Greater Cincinnati.
In April, P&G forecast organic sales growth for the fiscal year ended June 30th (excluding impacts from foreign exchange, acquisitions and divestitures). This is the worst increase since 2018.
Previous slowdowns in sales have prompted pressure to reduce operations at P&G. Between the P&G’s last smart reorganization and reduction, the company cut 34,000 jobs between 2012 and 2018 and slimmed 92,000 workers around the world. It remains on sale and spin-offs of a large portfolio of over 40 beauty brands, including IAMS Pet Food, Duracell Battery, Clare Roll and Wella Hair Coloring, and Cover Girl Makeup.
P&G said it would cut non-manufacturing jobs (a little over half of the company’s staff) by 15%. The company employs around 10,000 office workers primarily in its hometown, so Cuts could have a major impact in the Cincinnati area.
Last year, P&G booked profits of $14.9 billion with total revenue of $84 billion.
