PG 10-Q: Smart Summary

• Basis: Unaudited Consolidated Financial Statements of The Procter & Gamble Company and subsidiaries should be read in conjunction with the Annual Report on Form 10-K for the fiscal year ended June 30, 2025, and are prepared in conformity with U.S. GAAP pursuant to SEC rules for interim financial information.
• Management view: In management's opinion, the statements contain all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods reported; however, interim results may not be indicative of annual results.

• ASU 2023-09 (Income Taxes): Requires consistent categories and greater disaggregation in the rate reconciliation and income taxes paid by jurisdiction; effective for the fiscal year ending June 30, 2026 and will require additional disclosures in the Income Tax footnote but will not have a material impact on Consolidated Financial Statements.
• ASU 2024-03 (Expense Disaggregation): Requires disclosures about significant expense categories including inventory purchases, employee compensation, depreciation, amortization, and selling expenses; effective for the fiscal year ending June 30, 2028 and interim periods within the fiscal year ending June 30, 2029 — impact on disclosures is currently being assessed.
• ASU 2025-06 (Internal-Use Software) and ASU 2025-10 (Government Grants): ASU 2025-06 amends accounting for and disclosure of software costs, effective fiscal year ending June 30, 2029 and interim periods within that year; ASU 2025-10 provides guidance on recognition, measurement, and presentation of government grants, effective fiscal year ending June 30, 2030 and interim periods within that year — both are currently being assessed for impact on Consolidated Financial Statements.
• All other pronouncements: No other new accounting pronouncement issued or effective during the fiscal year had, or is expected to have, a material impact on Consolidated Financial Statements.

• Segment structure: P&G reports 5 reportable segments — Beauty, Grooming, Health Care, Fabric & Home Care, and Baby, Feminine & Family Care — each composed of specific product categories as defined in the note. A Corporate category captures items not allocated to the reportable segments.
• Other segment items: For each reportable segment, 'Other segment items' includes interest expense, interest income, and certain other non-operating income/(expense). In the six months ended December 31, 2024, Corporate 'Other segment items' included a non-cash charge of $752M for accumulated foreign currency translation losses due to the substantial liquidation of operations in Argentina.
• Assets by segment: The CODM does not use assets by segment to evaluate performance or allocate resources; accordingly, assets by segment are not disclosed.

• Goodwill by segment: Total goodwill was $41.7B at December 31, 2025, up from $41.6B at June 30, 2025, with the increase driven entirely by currency translation ($15M); there were no acquisitions or divestitures during the period. Segment balances at December 31, 2025: Beauty $14.2B, Grooming $13B, Health Care $7.9B, Fabric & Home Care $1.9B, Baby, Feminine & Family Care $4.6B.
• Identifiable intangibles: At December 31, 2025, gross carrying amount was $28.9B ($9.2B determinable-lived, net of $7.2B accumulated amortization; $19.7B indefinite-lived). Determinable-lived assets consist of brands, patents, technology, and customer relationships; indefinite-lived assets primarily consist of brands. Amortization expense was $77M and $80M for the three months ended December 31, 2025 and 2024, respectively, and $156M and $163M for the six months ended December 31, 2025 and 2024, respectively.
• Gillette impairment headroom: As of December 31, 2025, the Gillette indefinite-lived intangible asset's carrying value was $12.8B, and its fair value exceeds carrying value by greater than 10%; all other goodwill reporting units and indefinite-lived intangible assets have fair values that significantly exceed carrying values. Sensitivity analysis shows that, in isolation, a +25 basis-point increase in the discount rate, a -25 basis-point decrease in growth rates, or a -50 basis-point decrease in the royalty rate would each reduce estimated fair value by approximately (5)%, (5)%, and (4)%, respectively.

• Antidilutive options excluded: For the three months ended December 31, 2025 and 2024, weighted average antidilutive stock options excluded from the diluted EPS calculation were 23 million and 8 million, respectively; for the six months ended December 31, 2025 and 2024, these were 19 million and 4 million, respectively.
• Preferred dividends: Preferred dividends of $73M (Q2 FY2026) and $146M (six months ended December 31, 2025) are deducted from Net earnings attributable to P&G to arrive at the basic earnings available to common shareholders.

• Share-based compensation expense: $140,000 for the three months ended December 31, 2025 vs. $136,000 in the prior-year period; $262,000 for the six months ended December 31, 2025 vs. $241,000 in the prior-year period.
• Net periodic pension benefit cost: $26,000 for both the three months ended December 31, 2025 and 2024; $65,000 for the six months ended December 31, 2025 vs. $63,000 in the prior-year period.
• Net periodic other retiree benefit credit: ($149,000) for the three months ended December 31, 2025 vs. ($180,000) in the prior-year period; ($302,000) for the six months ended December 31, 2025 vs. ($360,000) in the prior-year period.

• Risk management policies: No significant changes in risk management policies or activities during the six months ended December 31, 2025; valuation techniques for financial assets and liabilities were unchanged, no transfers occurred between levels of the fair value hierarchy, no significant Level 3 activity, and no significant assets or liabilities re-measured at fair value on a non-recurring basis.
• Cash equivalents and debt fair value: Cash equivalents were $9.4B and $8.3B as of December 31, 2025 and June 30, 2025, respectively, classified as Level 1; the fair value of long-term debt (including current portion of $6.4B and $5.3B, respectively) was $31.3B and $29.5B at those same dates, classified as Level 2.
• Derivative positions: Total derivatives at fair value carried a notional of $21.7B (December 31, 2025) vs. $18.7B (June 30, 2025), with aggregate fair value assets of $33M vs. $19M and liabilities of ($712M) vs. ($1.1B); the increase in fair value hedge notional on interest rate contracts (from $3.3B to $5.3B) was driven by debt portfolio rebalancing to meet interest rate risk management objectives; all derivative assets and liabilities are Level 2.
• Collateral/credit-risk provisions: Instruments covered by netting and collateral agreements in a liability position totaled $706M and $1.1B as of December 31, 2025 and June 30, 2025, respectively; the Company has not been required to post collateral as a result of these contractual features.
• OCI and earnings impact: Net investment hedge foreign currency interest rate contracts recognized OCI losses of ($17M) and ($3M) for the three and six months ended December 31, 2025, vs. gains of $857M and $356M in the comparable prior-year periods; gains excluded from effectiveness testing recognized in earnings were $65M and $136M for the three and six months ended December 31, 2025, respectively.

• AOCI balance: Total AOCI attributable to Procter & Gamble moved from ($12.1B) at June 30, 2025 to ($12.1B) at December 31, 2025, a net improvement of $27M after tax, driven primarily by a $25M gain in foreign currency translation and a $1M gain each in investment securities and postretirement benefit plans.
• Reclassifications: $14M was reclassified out of AOCI into the Consolidated Statement of Earnings on a pre-tax basis, entirely from postretirement benefit plans, which are reclassified into Other non-operating income/(expense), net as part of net periodic postretirement costs.
• Foreign currency translation: The ($11.3B) balance at December 31, 2025 includes both financial statement translation and changes in fair value of net investment hedges; noncontrolling interests absorbed ($9M) of OCI within this component, reducing the amount attributable to P&G.
• Investment securities: Balance improved marginally from $9M to $10M, with a $1M pre-tax OCI gain fully offset by a ($1M) tax effect, resulting in a net $1M increase.

Commitments

• Uncertain tax positions (next 12 months, ~$124M): Audit activity could be completed in multiple jurisdictions with accrued liabilities of approximately $124M, including interest and penalties; tax years open from 2010 forward across ~150 taxable jurisdictions.

Legal Proceedings

• Environmental remediation (ongoing): Subject to contingencies under environmental laws related to prior manufacturing and waste disposal; management does not believe ultimate resolution will materially affect financial position, results of operations, or cash flows.
• General litigation (ongoing): Subject to legal proceedings covering antitrust, product liability, advertising, contracts, patents, labor, and tax matters; management believes ultimate resolution will not materially affect financial position, results of operations, or cash flows.

• Program structure: The Company operates a Supply Chain Finance program (SCF) with several global financial institutions, under which participating suppliers can sell receivables from the Company to an SCF bank; the Company is not party to those supplier-bank agreements, provides no guarantee, and has no economic interest in a supplier's decision to sell a receivable.
• Payment terms and balance sheet classification: Supplier payment terms under SCF generally range from 60 to 180 days; all outstanding SCF amounts are recorded within Accounts payable on the Consolidated Balance Sheets, and associated payments are included in operating activities in the Consolidated Statements of Cash Flows.
• Outstanding balances: The amount due to suppliers participating in SCF and included in Accounts payable was approximately $5.8B as of both December 31, 2025 and June 30, 2025.

• Ongoing program baseline: Historically, the Company has incurred $250 to $500M annually in restructuring-type costs, funded by and included within Corporate for segment reporting purposes.
• Portfolio and productivity plan: In June 2025, the Company announced a plan expected to incur approximately $1.5 to $2B in before-tax restructuring costs over two years, with half expected by end of fiscal 2026 and the remainder in fiscal 2027; the plan includes a reduction of up to 7,000 non-manufacturing overhead personnel by end of fiscal 2027, as well as brand and market exits and supply chain/manufacturing optimization.
• Charges incurred: For the three months ended December 31, 2025, total before-tax charges were $369M ($180M in Costs of products sold, $171M in SG&A, $18M in Other non-operating income/(expense), net); for the six months ended December 31, 2025, charges totaled $584M ($280M in Costs of products sold, $277M in SG&A, $27M in Other non-operating income/(expense), net).
• Reserve movement: The restructuring reserve stood at $189M as of June 30, 2025, increased by $584M in costs incurred and decreased by $380M in costs paid/settled, resulting in a reserve of $393M as of December 31, 2025 (Separations $271M, Asset Related Costs $0, Other $122M).

• Non-GAAP measures used: Management refers to organic sales growth, Core earnings per share (Core EPS), adjusted free cash flow, and adjusted free cash flow productivity as non-GAAP measures, with definitions, rationale, and reconciliations to the most directly comparable U.S. GAAP measure provided at the end of the MD&A.
• Market share methodology: Market share and consumption estimates are based on a combination of vendor-purchased traditional brick-and-mortar and online data in key markets plus internal estimates; all market share references represent the percentage of sales in dollar terms on a constant currency basis, and data typically reflects a lag time of one or two months relative to the end of the reporting period.
• Volume measure: Organic volume growth excludes the impacts of acquisitions, divestitures, and certain one-time items, and is used to explain changes in organic sales.

• Business description: P&G describes itself as a global leader in the fast-moving consumer goods industry, selling branded consumer packaged goods in about 180 countries and territories through mass merchandisers, e-commerce (including social commerce), grocery stores, membership club stores, drug stores, department stores, distributors, wholesalers, specialty beauty stores, high-frequency stores, pharmacies, electronics stores, and professional channels, with on-the-ground operations in about 70 countries.
• Segment structure change: Effective July 1, 2024, the Beauty reportable business segment separated Skin and Personal Care into individual operating segments — Skin Care and Personal Care — including separation of management team, strategic decision-making, innovation plans, financial targets, budgets, and management reporting.
• Competitive environment: P&G operates in highly competitive markets against global, regional, and local competitors, including both branded products and retailers' private-label brands, across price tiers (super-premium, premium, mid-tier, and value-tier); management states the company believes it holds a leadership or significant market share position in the segments and markets in which it operates.

• Restructuring scope: In the fiscal year ended June 30, 2024, the Company initiated a limited market portfolio restructuring of business operations primarily in certain Enterprise Markets, including Argentina and Nigeria, to address challenging macroeconomic and fiscal conditions.
• Completion and charges: During the period ended September 30, 2024, the Company completed this restructuring with the substantial liquidation of its operations in Argentina, recording incremental restructuring charges of approximately $800M after tax, comprised primarily of non-cash charges for accumulated foreign currency translation losses previously included in Accumulated other comprehensive income/(loss).
• Cumulative program charges: Total incremental restructuring charges incurred under the program from the three-month period ended December 31, 2023, through the three-month period ended September 30, 2024, were approximately $1.2B after tax.

• Plan announcement: In June 2025, the Company announced a portfolio and productivity plan to streamline its portfolio and organization, targeting improvements in cost structure and competitiveness.
• Estimated costs: The Company expects to incur approximately $1.5 to $2B in before-tax restructuring costs over a two-year period, with half expected by the end of fiscal 2026 and the remainder in fiscal 2027.
• Workforce reduction: Restructuring activities — executed across the Sector Business Units, Enterprise Markets, Corporate Functions, and Global Business Services — include a planned reduction of up to 7,000 non-manufacturing overhead personnel by the end of fiscal 2027.
• Segment reporting treatment: Charges are funded by and included within Corporate for segment reporting purposes; restructuring charges above the normal ongoing level are reported as non-core charges.

• Glad JV termination: The Company and The Clorox Company jointly decided not to renew the Glad joint venture agreement; under the terms, Clorox will purchase the Company's minority interest at fair market value as of the agreement termination in January 2026.
• Expected proceeds and gain: Subject to market conditions and the parties' negotiations on fair market value, the Company expects to receive cash proceeds of approximately $500M and record an after-tax gain in the range of $250 to $300M in the third quarter of the fiscal year ended June 30, 2026.

• Net sales: $44.6B for the six months ended December 31, 2025, up $975M, or 2%, versus the prior year period; organic sales (excluding acquisitions, divestitures, and foreign exchange) increased 1%, with mid-single-digit organic growth in Beauty and low-single-digit growth in Grooming and Health Care, while Fabric & Home Care was unchanged and Baby, Feminine & Family Care declined low single digits.
• Net earnings: $9.1B, up $466M, or 5%, versus the prior year period, driven primarily by higher restructuring charges related to the substantial liquidation of operations in certain Enterprise Markets, including Argentina, in the prior year period; net earnings attributable to Procter & Gamble were $9.1B, up $481M, or 6%.
• EPS: Diluted EPS increased 7% to $3.73; Core EPS (which excludes incremental restructuring charges) increased 2% to $3.87.
• Cash flow: Operating cash flow was $10.4B; adjusted free cash flow (operating cash flow less capital expenditures, excluding transitional tax payments from the 2017 U.S. Tax Act) was $8.7B, with adjusted free cash flow productivity of 95% of net earnings.

• Net sales: Net sales grew 1% to $22.2B in the three months ended December 31, 2025, versus $21.9B in the prior-year period.
• Earnings pressure: Operating income declined 7% to $5.4B, with the operating margin contracting 200 basis points to 24.2%; net earnings attributable to Procter & Gamble fell 7% to $4.3B, with the corresponding margin down 180 basis points to 19.4%.
• Gross margin compression: Gross margin declined 120 basis points to 51.2%, while SG&A as a % of net sales increased 90 basis points to 27.1%, together driving the operating margin deterioration.
• EPS: Diluted net earnings per common share declined 5% to $1.78 from $1.88; Core net earnings per common share was unchanged at $1.88.

• Overall net sales: Net sales for the quarter increased 1% to $22.2B, driven by favorable foreign exchange of 1% and higher pricing of 1%, partially offset by a decline in unit volume of 1%; organic sales (excluding acquisitions, divestitures, and foreign exchange) were unchanged.
• Segment highlights: Beauty led with 5% net sales growth (volume +3%, FX +1%, price +2%, mix -1%); Health Care also grew 5% (FX +2%, price +1%, mix +2%, other +1%, volume -1%); Grooming grew 2% (FX +2%, price +2%, volume -2%); Fabric & Home Care grew 1% (price +1%, mix -1%); Baby, Feminine & Family Care declined 3% (volume -5%, FX +1%, other +1%).

• Gross margin: Decreased 120 basis points to 51.2% of net sales for the quarter, driven by 120 basis points of unfavorable product mix, 70 basis points of higher restructuring costs, 60 basis points of product and packaging investments, 60 basis points of higher costs from tariffs, and 20 basis points of unfavorable foreign exchange impacts, partially offset by 170 basis points of manufacturing productivity savings and 50 basis points of higher pricing.
• SG&A: Total SG&A spending increased 5% to $6B versus the prior year period; SG&A as a percentage of net sales increased 90 basis points to 27.1%, with marketing spending as a percentage of net sales up 80 basis points and overhead costs up 40 basis points (reflecting wage inflation and restructuring spending), partially offset by a 40 basis point decrease in other operating expenses as a percentage of net sales and 110 basis points of productivity-driven cost savings.
• Operating income: Decreased $375M, or 7%, to $5.4B, with operating margin contracting 200 basis points to 24.2% versus the prior year period, reflecting both the gross margin decline and higher SG&A as a percentage of net sales.

• Interest expense: $220M for the quarter, a decrease of $20M versus the prior year period.
• Interest income: $115M for the quarter, a decrease of $4M versus the prior year period.
• Other non-operating income/(expense): $160M for the quarter, a decrease of $64M versus the prior year period.

• Effective tax rate: 20.1% for the three months ended December 31, 2025, down from 20.3% for the three months ended December 31, 2024, primarily driven by discrete impacts related to uncertain tax positions, partially offset by lower excess tax benefits of share-based compensation in the current year.

• Net earnings: $4.3B for the quarter, a decrease of $328M, or 7%, versus the prior year period, driven primarily by the decrease in operating income.
• Foreign exchange impact: Positive impact of approximately $89M on net earnings for the quarter, including both transactional and translational impacts from converting earnings from foreign subsidiaries to U.S. dollars.
• Attributable earnings and EPS: Net earnings attributable to Procter & Gamble were $4.3B, a decrease of $311M, or 7%, for the quarter; diluted EPS decreased 5% to $1.78 versus the prior year period.

• Overall net sales: Net sales increased 2% to $44.6B for the six months ended December 31, 2025 vs. 2024, driven by a 1% increase from higher pricing and a 1% increase from favorable foreign exchange, with volume and mix unchanged.
• Organic growth: Excluding acquisitions, divestitures, and foreign exchange, organic sales increased 1%.
• Segment highlights: Beauty led with 6% net sales growth (4% volume, 1% FX, 2% price, -1% mix); Grooming grew 4% (2% FX, 3% price, -1% mix); Health Care grew 4% (-1% volume, 2% FX, 1% price, 2% mix); Fabric & Home Care grew 1% (-1% volume, 1% FX, 1% price); Baby, Feminine & Family Care declined 1% (-3% volume, 1% FX).

• Gross margin: Decreased 90 basis points to 51.3% of net sales, driven by 90 basis points of unfavorable product mix, 60 basis points each of product and packaging investments, higher tariff costs, and unfavorable foreign exchange impacts, and 50 basis points of higher restructuring costs; partially offset by 170 basis points of manufacturing productivity savings, 50 basis points of higher pricing, and 10 basis points of other items and rounding.
• SG&A: Total SG&A spending increased 4% to $11.7B versus the prior year period; SG&A as a percentage of net sales increased 30 basis points to 26.1%, driven primarily by a 30 basis point increase in marketing spending as a percentage of sales, while overhead costs as a percentage of net sales increased 20 basis points from wage inflation and restructuring spending, partially offset by productivity savings; productivity-driven cost savings delivered 100 basis points of benefit to SG&A as a percentage of net sales.
• Operating income: Decreased $316M, or 3%, to $11.2B, with operating margin decreasing 130 basis points to 25.2% versus the prior year period, due primarily to incremental restructuring charges in the current year.

• Interest expense: $417M for the period, a decrease of $61M versus the prior year period.
• Interest income: $222M for the period, a decrease of $32M versus the prior year period.
• Other non-operating income/(expense): $427M, an increase of $757M versus the prior year period, primarily due to a non-cash charge for accumulated foreign currency translation losses related to the substantial liquidation of operations in Argentina recorded in the prior year period.

• Effective tax rate: The effective income tax rate for the six months ended December 31, 2025 was 20.5%, down from 21.3% for the six months ended December 31, 2024, a decrease of approximately 80 basis points.
• Rate drivers: The decrease was primarily driven by the prior year charge for accumulated foreign currency translation losses due to the substantial liquidation of operations in Argentina (140 basis points) and discrete impacts related to uncertain tax positions, partially offset by a 120 basis point increase due to lower excess tax benefits of share-based compensation in the current year.

• Net earnings: Increased $466M, or 5%, to $9.1B, driven by an increase in other non-operating income/(expense), partially offset by a decrease in operating income; foreign exchange had a positive impact of approximately $85M, including both transactional and translational impacts from converting earnings from foreign subsidiaries to U.S. dollars.
• Net earnings attributable to Procter & Gamble: Increased $481M, or 6%, to $9.1B for the period.
• EPS: Diluted EPS increased 7% to $3.73 versus the prior year period due to the increase in net earnings; Core EPS (diluted EPS excluding charges for incremental restructuring) increased 2% to $3.87.

• Segment performance — three months: Beauty net sales grew 5% to $4B with net earnings down 2% to $763M; Grooming net sales grew 2% to $1.8B with net earnings down 9% to $417M; Health Care net sales grew 5% to $3.4B with net earnings up 2% to $770M; Fabric & Home Care net sales grew 1% to $7.7B with net earnings down 3% to $1.5B; Baby, Feminine & Family Care net sales declined 3% to $5.1B with net earnings down 9% to $1B.
• Total company — three months: Net sales of $22.2B, up 1%; earnings before income taxes of $5.4B, down 7%; net earnings of $4.3B, down 7%, with Corporate contributing a net loss of $161M.
• Segment performance — six months: Beauty net sales grew 6% to $8.2B with net earnings up 1% to $1.6B; Grooming net sales grew 4% to $3.6B with net earnings flat at $881M; Health Care net sales grew 4% to $6.6B with net earnings down 1% to $1.5B; Fabric & Home Care net sales grew 1% to $15.5B with net earnings down 3% to $3.1B; Baby, Feminine & Family Care net sales declined 1% to $10.3B with net earnings down 3% to $2.1B.
• Total company — six months: Net sales of $44.6B, up 2%; earnings before income taxes of $11.5B, up 4%; net earnings of $9.1B, up 5%, with Corporate contributing a net loss of $125M.

• Segment net sales: Beauty net sales increased 5% to $4B, driven by a 3% increase in unit volume, 2% pricing benefit, and 1% favorable foreign exchange, partially offset by 1% unfavorable geographic mix; excluding acquisitions, divestitures, and foreign exchange, organic sales increased 4%. Global market share of the Beauty segment decreased 0.3 points.
• Category performance: Hair Care net sales increased mid-single digits with organic sales up mid-single digits (mid-teens growth in Latin America, high single-digit in Asia Pacific, mid-single-digit in Europe, offset by mid-single-digit decline in North America); market share decreased 0.7 points. Personal Care net sales increased mid-single digits with organic sales up mid-single digits (high-teens in Europe, mid-single-digit in Greater China, low single-digit in North America); market share increased 0.4 points. Skin Care net sales increased low single digits aided by favorable product mix from the super-premium SK-II brand and higher pricing in Greater China, with volume declining due to competitive activity in Greater China; market share decreased 0.7 points.
• Net earnings: Net earnings decreased 2% to $763M as the net sales increase was more than offset by a 140 basis-point decline in net earnings margin, reflecting a 50 basis-point gross margin decline (driven by higher tariff costs, higher commodity costs, and unfavorable geographic mix, partially offset by productivity savings) and higher SG&A as a percentage of net sales due to increased marketing spending.

• Beauty net sales: Increased 6% to $8.2B, driven by a 4% unit volume increase, 2% higher pricing, and 1% favorable foreign exchange, partially offset by 1% unfavorable geographic mix; organic sales (excluding acquisitions, divestitures, and foreign exchange) increased 5%; global market share decreased 0.4 points.
• Category performance: Hair Care net sales increased mid-single digits with organic growth also mid-single digits (low-teens in Latin America, high single-digit in Europe, mid-single-digit in Asia Pacific, partially offset by low single-digit decline in North America; global market share down 0.8 points); Personal Care net sales increased high single digits with organic growth also high single digits led by mid-teens in Europe, high single-digit in Greater China, and mid-single-digit in North America (global market share up 0.3 points); Skin Care net sales increased low single digits organically (high single-digit growth in Greater China, mid-single-digit in Asia Pacific, partially offset by low single-digit decline in North America; global market share down 0.7 points).
• Net earnings: Increased 1% to $1.6B on higher net sales, offset by an 80 basis-point decline in net earnings margin; gross margin declined 70 basis points driven by higher cost of tariffs, unfavorable category mix, and higher commodities, partially offset by productivity savings; SG&A as a % of net sales was unchanged as higher marketing spending was offset by lower overhead spending.

• Net sales: Grooming net sales increased 2% to $1.8B, driven by innovation-driven pricing of 2% (primarily North America and Europe) and favorable foreign exchange of 2%, partially offset by a unit volume decrease of 2%; volume declined in North America (market contraction) and Asia Pacific (competitive activity).
• Organic sales: Excluding acquisitions, divestitures, and foreign exchange, organic sales were unchanged, as mid-single-digit growth in Europe was offset by a high single-digit decline in Asia Pacific and a mid-single-digit decline in North America; global market share decreased 0.4 points.
• Net earnings: Net earnings decreased 9% to $417M, reflecting a 290 basis-point decrease in net earnings margin; gross margin declined 190 basis points driven by unfavorable product mix and higher cost of tariffs, partially offset by productivity savings and higher pricing, while SG&A as a % of net sales rose due to higher marketing spending.

• Grooming net sales: Increased 4% to $3.6B for the six months ended December 31, 2025, with higher pricing contributing 3% (driven by North America and Europe) and favorable foreign exchange contributing 2%, partially offset by unfavorable geographic mix of 1%; unit volume was unchanged as growth in Latin America (due to increased distribution) was offset by declines in North America (market contraction) and IMEA (competitive activity).
• Organic sales growth: Grooming organic sales increased 2% (excluding acquisitions, divestitures, and foreign exchange), driven by mid-single-digit growth in Europe and Latin America, partially offset by a low single-digit decline in North America; global market share decreased 0.6 points.
• Net earnings and margin: Net earnings were unchanged at $881M as the increase in net sales was offset by a 110 basis-point decrease in net earnings margin; gross margin declined 90 basis points due to unfavorable product mix and higher tariff costs (partially offset by higher pricing and productivity savings), while SG&A as a % of net sales decreased on lower overhead spending (partially offset by higher marketing spending), and the effective tax rate increased due to unfavorable geographic mix.

• Net sales: Health Care net sales increased 5% to $3.4B for the three months ended December 31, 2025, with favorable product mix contributing 2%, favorable foreign exchange 2%, and higher pricing 1%, partially offset by a 1% decrease in unit volume; organic sales (excluding acquisitions, divestitures, and foreign exchange) increased 3%, and global market share of the Health Care segment increased 0.3 points.
• Oral Care: Net sales increased mid-single digits driven by favorable product mix (growth of power brushes and premium paste) and favorable foreign exchange, partially offset by lower pricing (investments in North America and Europe) and a unit volume decline concentrated in Greater China (market contraction and competitive activity); organic sales increased low single digits, with a high single-digit increase in Europe and a low single-digit increase in North America offset by a mid-teens decrease in Greater China; global market share of the Oral Care category decreased 0.1 points.
• Personal Health Care: Net sales increased mid-single digits driven by higher pricing (North America) and favorable foreign exchange, partially offset by unfavorable product mix (decline of respiratory products); unit volume was unchanged as IMEA and Europe increases (both innovation-driven) were offset by a North America decrease (lower average incidence of cough and cold); organic sales increased low single digits with a high single-digit increase in Latin America, mid-single-digit increase in Europe, and low single-digit increase in North America; global market share increased 0.4 points.
• Net earnings: Net earnings increased 2% to $770M, with net earnings margin declining 70 basis points due to an 80-basis-point gross margin decrease (driven by unfavorable geographic mix and higher cost of tariffs, partially offset by productivity savings) and a higher effective tax rate from unfavorable geographic mix, partially offset by a decrease in SG&A as a percentage of net sales (lower overhead spending, partially offset by higher marketing spending).

• Health Care net sales: Increased 4% to $6.6B, driven by favorable product mix of 2%, favorable foreign exchange of 2%, and higher pricing of 1%, partially offset by a 1% decrease in unit volume; excluding acquisitions/divestitures and foreign exchange, organic sales increased 2%, and global market share of the Health Care segment increased 0.3 points.
• Oral Care: Net sales increased low single digits on favorable product mix (growth of premium paste and power brushes) and favorable foreign exchange, partially offset by unit volume decrease and lower pricing; organic sales also increased low single digits with mid-single-digit growth in Europe and low single-digit growth in North America, partially offset by a double-digit decrease in Greater China (market contraction and competitive activity); global market share of the Oral Care category decreased 0.2 points.
• Personal Health Care: Net sales increased mid-single digits on higher pricing (driven by North America and Latin America) and favorable foreign exchange, partially offset by unit volume decrease (North America lower cough/cold incidence); organic sales increased low single digits with double-digit growth in Latin America and mid-single-digit growth in Europe, partially offset by a low single-digit decline in North America; global market share of the Personal Health Care category increased 0.4 points.
• Net earnings: Decreased 1% to $1.5B as the net sales increase was more than offset by a 90 basis-point decrease in net earnings margin; gross margin declined 120 basis points driven by unfavorable geographic mix and higher tariff costs (partially offset by higher pricing), while SG&A as a % of net sales decreased primarily due to reduced overhead spending, partially offset by increased marketing spending.

• Fabric & Home Care net sales: Increased 1% to $7.7B, driven by favorable foreign exchange of 1% and higher pricing of 1%, partially offset by unfavorable product mix of 1%; unit volume was unchanged and organic sales were unchanged; global market share of the segment decreased 0.2 points.
• Fabric Care: Net sales increased low single digits as favorable foreign exchange was partially offset by unfavorable product mix; unit volume was unchanged as growth in North America (innovation) and Latin America (market growth) was offset by a decline in Europe (competitive activity); organic sales were unchanged; global market share of the Fabric Care category decreased 0.6 points.
• Home Care: Net sales increased low single digits driven by higher pricing (primarily in North America) and favorable foreign exchange, partially offset by a decrease in unit volume (North America decline due to shift in customer order timing for merchandising events, partially offset by Latin America increase due to innovation); organic sales also increased low single digits; global market share of the Home Care category increased 0.3 points.
• Net earnings: Decreased 3% to $1.5B due to a 90 basis-point decrease in net earnings margin; gross margin declined 90 basis points driven by unfavorable product mix and higher cost of tariffs, partially offset by productivity savings; SG&A as a percentage of net sales decreased due to lower overhead spending, partially offset by higher marketing spending.

• Fabric & Home Care net sales: Net sales increased 1% to $15.5B, with favorable foreign exchange contributing 1% and higher pricing contributing 1%, partially offset by a unit volume decline of 1%; organic sales (excluding foreign exchange and acquisitions/divestitures) were unchanged, and global market share decreased 0.3 points.
• Fabric Care: Net sales increased low single digits driven by favorable foreign exchange, partially offset by a unit volume decline; organic sales decreased low single digits, with a mid-single-digit decrease in Europe partially offset by a low single-digit increase in North America; global market share of the Fabric Care category decreased 0.7 points.
• Home Care: Net sales increased low single digits driven by higher pricing (primarily in North America and Europe) and favorable foreign exchange, partially offset by a unit volume decrease; organic sales also increased low single digits, with low single-digit growth in Europe and North America partially offset by a mid-single-digit decline in Asia Pacific; global market share of the Home Care category increased 0.4 points.
• Net earnings: Net earnings decreased 3% to $3.1B on a 90 basis-point decrease in net earnings margin, driven by a 100 basis-point gross margin decrease from unfavorable product mix and higher tariff costs (partially offset by productivity savings), with SG&A as a % of net sales declining due to lower overhead and marketing spending.

• Net sales: Baby, Feminine & Family Care net sales decreased 3% to $5.1B, driven by a unit volume decline of 5%, partially offset by favorable foreign exchange of 1%; organic sales decreased 4% and global market share of the segment decreased 0.3 points.
• Baby Care: Net sales were unchanged as favorable foreign exchange and higher pricing (primarily in North America) were offset by a unit volume decline and unfavorable geographic mix; organic sales decreased low single digits, driven by a double-digit decline in North America, partially offset by a 20% increase in Greater China; global market share of the Baby Care category increased 0.4 points.
• Feminine Care & Family Care: Feminine Care net sales increased low single digits but organic sales decreased low single digits, led by a mid-single-digit decline in IMEA and a low single-digit decline in Europe, with global market share down 0.2 points; Family Care net sales and organic sales each decreased double digits due to a unit volume decrease (reflecting strong consumption offtake and retail inventory build in the prior year) and lower pricing, with North America market share down 1.1 points.
• Net earnings: Net earnings decreased 9% to $1B, with net earnings margin down 120 basis points due to a 70-basis-point gross margin decrease (driven by unfavorable category mix and higher cost of tariffs, partially offset by lower commodity costs and productivity savings) and increased SG&A as a percentage of net sales from higher marketing spending.

• Segment net sales: Baby, Feminine & Family Care net sales decreased 1% to $10.3B, driven by a unit volume decline of 3%, partially offset by favorable foreign exchange of 1% and favorable category mix of 1%; organic sales decreased 2%, and global market share declined 0.2 points.
• Category-level sales drivers: Baby Care net sales increased low single digits (organic sales unchanged, with a 20% increase in Greater China and a low single-digit increase in Europe offset by a mid-single-digit decline in North America); Feminine Care net sales increased low single digits (organic sales unchanged, with low single-digit growth in North America offset by a high single-digit decline in IMEA and a low single-digit decline in Europe); Family Care net sales decreased mid-single digits driven by a unit volume decrease and lower pricing, with organic sales also down mid-single digits.
• Market share: Baby Care global market share increased 0.4 points; Feminine Care global market share decreased 0.1 points; Family Care North America market share decreased 0.9 points.
• Net earnings: Net earnings decreased 3% to $2.1B, reflecting a 40 basis-point decline in net earnings margin; gross margin declined 30 basis points due to unfavorable category mix and higher tariff costs (partially offset by productivity savings and lower commodity costs), while SG&A as a percentage of net sales decreased due to lower overhead spending, partially offset by higher marketing spending.

• Corporate definition: Corporate includes operating and non-operating activities not allocated to specific segments — incidental businesses, gains/losses on divested brands, financing and investing activity impacts, employee benefit impacts, asset impairments, and restructuring activities including manufacturing and workforce optimization. The most notable ongoing reconciling item is income taxes, which adjusts blended statutory rates reflected in reportable segments to the overall Company effective tax rate.
• Q2 results (three months ended December 31, 2025): Corporate net sales increased $1M to $160M; Corporate net earnings decreased $137M to a loss of $161M, due primarily to incremental restructuring charges in the current year.
• YTD results (six months ended December 31, 2025): Corporate net sales increased $80M to $402M; Corporate net earnings increased $606M to a loss of $125M, driven primarily by restructuring charges in the prior year period related to the substantial liquidation of operations in certain Enterprise Markets, including Argentina, partially offset by current year restructuring charges.

• Operating cash flow: $10.4B fiscal year to date, an increase of $1.3B versus the prior year period.
• Earnings-to-cash conversion: Net earnings adjusted for non-cash items (depreciation and amortization, share-based compensation expense, deferred income taxes, and (gain)/loss on sale of assets) generated $11.1B of operating cash flow.
• Working capital drag: Working capital and other impacts consumed $753M of cash — accounts receivable consumed $92M (days sales outstanding decreased by one day), inventory growth consumed $255M driven by increased safety stock levels and new product initiatives (days inventory on hand decreased by one day), and trade payables provided $239M driven by increased supply chain activity and marketing support.
• Other cash uses: An additional $645M was consumed primarily by the payment of the transitional tax related to the 2017 U.S. Tax Act and a reduction in postretirement benefit and compensation accruals, partially offset by current year income tax accruals in excess of estimated payments.

• Investing activities: Used $2.8B of cash fiscal year to date, primarily driven by capital expenditures.

• Financing activities: Used $6.3B of net cash fiscal year to date, mainly due to dividends to shareholders and treasury stock purchases, partially offset by a net debt increase.
• Working capital deficit: Current liabilities exceeded current assets by $10.1B as of December 31, 2025; management anticipates supporting short-term liquidity and operating needs largely through cash generated from operations.
• Debt refinancing: Management states strong short- and long-term debt ratings have enabled, and should continue to enable, refinancing of debt as it becomes due at favorable rates in commercial paper and bond markets, supplemented by agreements with a diverse group of financial institutions for short-term financing if needed.

• Organic sales growth: Organic sales strips out foreign exchange and acquisition/divestiture impacts; for the three months ended December 31, 2025, total company net sales grew 1% but organic sales growth was flat (0%), with FX a 1% drag; for the six months ended December 31, 2025, total company net sales grew 2% with organic sales growth of 1%, again offset by 1% FX headwind. At the segment level for the six-month period, Beauty led with 5% organic growth, followed by Grooming and Health Care at 2% each, while Baby, Feminine & Family Care was (2)% and Fabric & Home Care was flat.
• Adjusted free cash flow: For the six months ended December 31, 2025, operating cash flow of $10.4B less capital spending of ($2.4B) plus $688M in 2017 U.S. Tax Act payments yielded adjusted free cash flow of $8.7B; adjusted free cash flow productivity (ratio of adjusted free cash flow to net earnings) was 95%, with net earnings of $9.1B.
• Core EPS vs. GAAP EPS: For the three months ended December 31, 2025, GAAP diluted EPS was $1.78 and Core EPS was $1.88 (flat versus the prior-year $1.88), with $0.10 per share of incremental restructuring excluded; GAAP net earnings attributable to P&G fell (7)% and Core net earnings attributable to P&G fell (1)% year-over-year. For the six months ended December 31, 2025, GAAP diluted EPS was $3.73 and Core EPS was $3.87 (up 2% versus prior-year Core EPS of $3.81), with $0.14 per share of incremental restructuring excluded; GAAP net earnings attributable to P&G grew 6% while Core net earnings attributable to P&G was flat.
• Incremental restructuring definition: The Core EPS adjustment excludes restructuring charges above the Company's historical ongoing level of approximately $250–$500M before tax; the June 5, 2025 portfolio and productivity plan and the prior limited market portfolio restructuring (substantially completed with Argentina's liquidation in the period ended September 30, 2024) are the primary drivers of the incremental restructuring add-back.