PG 10-Q: Smart Summary

• Basis of preparation: The unaudited Consolidated Financial Statements of The Procter & Gamble Company and subsidiaries are prepared in conformity with U.S. GAAP under SEC interim reporting rules and should be read in conjunction with the Annual Report on Form 10-K for the fiscal year ended June 30, 2025.
• Management assertion: Management states the statements contain all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, but notes that 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 — 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 for the 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 for the 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 comprising specific product categories. A Corporate category captures items not allocated to the reportable segments.
• Assets by segment: The CODM does not use assets by segment to evaluate performance or allocate resources; accordingly, assets by segment are not disclosed.
• Notable Corporate items: For the three and nine months ended March 31, 2026, Corporate 'Other segment items' includes non-operating income comprised primarily of a $343M gain due to the dissolution of the Glad joint venture business. For the nine months ended March 31, 2025, 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.
• Operating segment mix: Fabric Care is the largest individual operating segment at 23% of net sales in both the three and nine months ended March 31, 2026 and 2025; Skin Care is the smallest at 3% in all periods presented.

• Goodwill rollforward: Total goodwill declined from $41.6B at June 30, 2025 to $41.4B at March 31, 2026, primarily due to currency translation ($330M reduction), partially offset by a $40M acquisition within Health Care; by segment, ending balances were Beauty $14.1B, Grooming $12.9B, Health Care $7.9B, Fabric & Home Care $1.8B, and Baby, Feminine & Family Care $4.6B.
• Identifiable intangibles: As of March 31, 2026, gross carrying amount was $28.7B ($9.2B determinable-lived, $19.5B indefinite-lived), with accumulated amortization of ($7.2B) against the determinable-lived portion; amortization expense was $76M for the three months ended March 31, 2026 (vs. $78M in the prior-year quarter) and $232M for the nine months ended March 31, 2026 (vs. $241M).
• Gillette indefinite-lived intangible — impairment risk: Based on annual impairment testing performed during the three months ended December 31, 2025, the Gillette indefinite-lived intangible asset's fair value exceeds its carrying value by greater than 10%; as of March 31, 2026, carrying value was $12.8B, and management concluded no triggering event occurred in the quarter ended March 31, 2026, though the asset is described as susceptible to impairment risk from adverse currency, inflation, or economic recession.
• Gillette sensitivity analysis: A +25 basis-point increase in the discount rate or a -25 basis-point decrease in short-term and residual growth rates would each reduce estimated fair value by approximately (5)%; a -50 basis-point decrease in the royalty rate would reduce estimated fair value by approximately (4)%.

• Antidilutive options excluded: For the three months ended March 31, 2026 and 2025, antidilutive stock options excluded from the diluted EPS calculation were 22 million and 8 million, respectively; for the nine months ended March 31, 2026 and 2025, they were 20 million and 6 million, respectively.
• Dilution methodology: Diluted shares include the dilutive effect of stock options and other share-based awards under the treasury stock method and the assumed conversion of preferred stock; basic EPS deducts preferred dividends from Net earnings attributable to P&G before dividing by basic weighted average shares.

• Risk management policies: No significant changes in risk management policies or activities during the nine months ended March 31, 2026; no transfers between fair value hierarchy levels during the periods presented, 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 $11.1B (March 31, 2026) and $8.3B (June 30, 2025), classified as Level 1; fair value of long-term debt (including current portion of $6.5B and $5.3B, respectively) was $29.4B and $29.5B at those same dates, classified as Level 2.
• Hedging instruments: Total derivatives at fair value carried a notional amount of $19.3B (March 31, 2026) vs. $18.7B (June 30, 2025), with aggregate fair value assets of $88M vs. $19M and liabilities of ($568M) vs. ($1.1B); the increase in notional balance of interest rate contracts in fair value hedges (from $3.3B to $5.3B) reflects debt portfolio rebalancing, while the decrease in net investment hedge notionals was driven by swap maturities.
• Collateral and credit risk: The aggregate fair value of instruments covered by netting/collateral agreements that are in a liability position was $477M (March 31, 2026) and $1.1B (June 30, 2025); the Company has not been required to post collateral as a result of these contractual features.

• AOCI balance: Total AOCI attributable to Procter & Gamble moved from ($12.1B) at June 30, 2025 to ($12.3B) at March 31, 2026, net of tax, reflecting a ($171M) decrease in the nine-month period.
• Foreign currency translation: The largest component, ending at ($11.5B), drove most of the period's deterioration with ($186M) of net-of-tax OCI (including a ($16M) portion attributable to noncontrolling interests); this component includes financial statement translation and changes in fair value of net investment hedges.
• Postretirement benefit plans: Improved from ($777M) to ($763M), with $15M reclassified to the Consolidated Statement of Earnings (recorded in Other non-operating income/(expense), net as part of net periodic postretirement costs) partially offset by a ($4M) tax effect.
• Investment securities: Modest positive move from $9M to $10M, with $2M of pre-tax OCI before reclassifications and a ($1M) tax effect; no amounts were reclassified to earnings.

Commitments

• Uncertain tax positions (next 12 months, ~$121M): Audit activity could be completed in multiple jurisdictions with accrued liabilities of approximately $121M, including interest and penalties; tax years open from 2013 forward across ~150 taxable jurisdictions.

Legal Proceedings

• General litigation (ongoing): Management and counsel believe ultimate resolution of various lawsuits covering antitrust, product liability, patents, labor, and other matters will not materially affect financial position, results of operations, or cash flows.
• Environmental contingencies (ongoing): Potential future remediation obligations from prior manufacturing and waste disposal practices; management does not believe ultimate resolution will be material.

• Program structure: The Company supports a Supply Chain Finance program (SCF) with several global financial institutions, under which participating suppliers sell receivables from the Company directly to SCF banks; the Company is not party to those supplier-bank agreements, provides no form of guarantee, and has no economic interest in a supplier's decision to sell a receivable.
• Payment terms and balance sheet classification: Payment terms for suppliers under SCF generally range from 60 to 180 days; all outstanding amounts are recorded within Accounts payable and associated payments are included in operating activities within the Consolidated Statements of Cash Flows.
• Outstanding balances: Amounts due to SCF-participating suppliers included in Accounts payable were approximately $5.7B as of March 31, 2026 and $5.8B as of June 30, 2025.

• Ongoing program baseline: The Company has historically incurred annual restructuring costs in the range of $250 to $500M; charges are funded by and reported 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 over half expected by end of fiscal 2026 and the remainder in fiscal 2027; the plan includes 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 March 31, 2026, total before-tax charges were $198M ($138 in Costs of products sold, $53 in SG&A, $6 in Other non-operating income/(expense), net); for the nine months ended March 31, 2026, total charges were $782M ($418 in Costs of products sold, $330 in SG&A, $33 in Other non-operating income/(expense), net).
• Reserve movement: The restructuring reserve increased from $189M at June 30, 2025 to $269M at March 31, 2026, reflecting $782M of costs incurred and $701M of costs paid/settled during the nine months ended March 31, 2026; the Asset Related Costs reserve was $0 at both period ends as those charges are fully settled as incurred.

• Non-GAAP measures used: Management references 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, usage 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 draw 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 of one or two months relative to the end of the reporting period.
• Organic volume: Organic volume growth reflects year-over-year changes in unit volume excluding the impacts of acquisitions and divestitures and certain one-time items, and is used to explain changes in organic sales.

• Business description: P&G sells branded consumer packaged goods across 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, professional channels, and direct-to-consumer; on-the-ground operations exist in about 70 countries.
• Competitive environment: P&G competes against global, regional, and local competitors as well as retailers' private-label brands across price tiers (super-premium, premium, mid-tier and value-tier), and management states it often holds a leadership or significant market share position in the segments and markets in which it operates.
• 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 teams, strategic decision-making, innovation plans, financial targets, budgets, and management reporting.

• Program completion: The Company completed its limited market portfolio restructuring during the period ended September 30, 2024, with the substantial liquidation of its operations in Argentina, which had been initiated in the fiscal year ended June 30, 2024, to address challenging macroeconomic and fiscal conditions in certain Enterprise Markets including Argentina and Nigeria.
• Incremental charges: The Company recorded incremental restructuring charges of approximately $800M after tax during the period ended September 30, 2024, comprised primarily of non-cash charges for accumulated foreign currency translation losses previously included in Accumulated other comprehensive income/(loss).
• Total program charges: Cumulative restructuring charges 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 and scope: In June 2025, the Company announced a portfolio and productivity plan to streamline its portfolio and organization to improve its cost structure and competitiveness, with restructuring activities to be executed across the Sector Business Units as well as the Enterprise Markets, Corporate Functions and Global Business Services.
• Expected costs and timing: The Company expects to incur approximately $1.5 to $2B in before-tax restructuring costs over a two-year period, with over half of the costs expected to be incurred by the end of fiscal 2026 and the remainder in fiscal 2027.
• Headcount reduction: The restructuring activities include a plan for a reduction of up to 7,000 non-manufacturing overhead personnel by the end of fiscal 2027.
• Segment reporting treatment: Resulting 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 joint venture dissolution: The joint venture agreement between the Company and The Clorox Company expired in January 2026; under its terms, Clorox purchased the Company's minority interest at fair market value for $476M, which was accounted for as a dissolution of the Glad joint venture business, resulting in an after-tax gain of $261M.

• IEEPA tariff ruling: On February 20, 2026, the U.S. Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were invalid; the Company previously paid approximately $200M in IEEPA tariffs that may be recoverable, but has not yet recognized any recovery in its consolidated financial statements.

• Net sales: $65.8B for the nine months ended March 31, 2026, up $2.4B, or 4%, versus the prior year period, with high single-digit growth in Beauty, mid-single digits in Grooming and Health Care, and low single digits in Fabric & Home Care and Baby, Feminine & Family Care; organic sales (excluding acquisitions, divestitures, and foreign exchange) increased 2%.
• Net earnings: $13.1B, up $624M, or 5%, versus the prior year period, driven 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 $13B, up $643M, or 5%.
• EPS: Diluted EPS increased 7% to $5.36; Core EPS (excluding the gain from the dissolution of the Glad joint venture business and incremental restructuring charges) increased 2% to $5.46.
• Cash flow: Operating cash flow was $14.4B; adjusted free cash flow (operating cash flow less capital expenditures, excluding payments for the transitional tax from the 2017 U.S. Tax Act) was $11.7B; adjusted free cash flow productivity was 92% of net earnings excluding the Glad joint venture dissolution gain.

• Net sales: Net sales grew 7% to $21.2B in the three months ended March 31, 2026, from $19.8B in the three months ended March 31, 2025.
• Earnings: Operating income was essentially flat (—%) at $4.6B vs. $4.6B; earnings before income taxes rose 7% to $5B; net earnings attributable to Procter & Gamble rose 4% to $3.9B; diluted net earnings per common share increased 6% to $1.63; core net earnings per common share increased 3% to $1.59.
• Margin compression: Gross margin contracted 150 basis points to 49.5% from 51.0%, and operating income margin fell 150 basis points to 21.5% from 23.0%, while SG&A as a % of net sales rose 10 basis points to 28.0% from 27.9%.

• Overall net sales: Net sales for the quarter increased 7% to $21.2B, driven by favorable foreign exchange of 4%, a unit volume increase of 2%, and higher pricing of 1%; mix was unchanged. Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales increased 3%.
• Top-performing segment: Beauty led all segments with 11% net sales growth, composed of 5% volume, 4% foreign exchange, 1% price, and 1% mix. Grooming and Health Care each grew 7%, while Fabric & Home Care grew 7% and Baby, Feminine & Family Care grew 6%.
• Volume trends: Grooming and Health Care each posted volume declines of 2% (excluding acquisitions & divestitures), while Beauty was the only segment with a meaningful positive volume contribution at 5%.

• Gross margin: Decreased 150 basis points to 49.5% of net sales, with the largest drag from unfavorable product mix (180 bps), product and packaging investments (100 bps), higher restructuring costs (50 bps), higher tariff costs (50 bps), and higher commodity costs (10 bps), partially offset by manufacturing productivity savings (210 bps) and higher pricing (50 bps).
• SG&A: Total SG&A spending increased 7% to $5.9B versus the prior year period; as a percentage of net sales, SG&A increased 10 basis points to 28.0%, driven by a 20-bps increase in marketing spending as a percentage of net sales, partially offset by a 10-bps decrease in overhead costs and a 10-bps decrease in other operating expenses as a percentage of net sales; productivity-driven cost savings delivered 120 basis points of benefit to SG&A as a percentage of net sales.
• Operating income and margin: Operating income was unchanged at $4.6B as the net sales increase was offset by gross margin compression and higher SG&A; operating margin decreased 150 basis points to 21.5% versus the prior year period, driven primarily by the gross margin decrease and higher restructuring charges.

• Interest expense: $223M for the quarter, up $6M versus the prior year period.
• Interest income: $100M for the quarter, down $11M versus the prior year period.
• Other non-operating income/(expense), net: $537M, an increase of $327M versus the prior year period, driven primarily by the gain from the dissolution of the Glad joint venture business in the current year.

• Effective tax rate: The effective income tax rate was 20.8% for the three months ended March 31, 2026, up from 18.6% for the three months ended March 31, 2025, a 220 basis-point increase overall.
• Rate drivers: The increase was primarily driven by a 100 basis-point increase due to discrete impacts related to uncertain tax positions, lower excess tax benefits of share-based compensation in the current year, and unfavorable geographic mix impacts.

• Net earnings: $4B for the quarter, up $158M, or 4%, versus the prior year period, driven by the increase in other non-operating income/(expense), net, partially offset by higher income taxes.
• Foreign exchange impact: Positive impact of approximately $101M on net earnings for the quarter, including both transactional and translational impacts from converting earnings from foreign subsidiaries to U.S. dollars.
• Net earnings attributable to P&G: $3.9B, an increase of $163M, or 4%, for the quarter; diluted EPS increased 6% to $1.63 versus the prior year period.
• Core EPS: Increased 3% to $1.59, representing diluted EPS excluding the gain from the dissolution of the Glad joint venture business and charges for incremental restructuring.

• Overall growth: Net sales for the nine months ended March 31, 2026 increased 4% to $65.8B, driven by a 2% increase from favorable foreign exchange and a 1% increase from higher pricing, with volume and mix unchanged; excluding acquisitions, divestitures, and foreign exchange, organic sales increased 2%.
• Segment leaders: Beauty posted the highest net sales growth at 7%, with volume (including acquisitions & divestitures) up 4%, foreign exchange contributing 2%, and price up 2%; Grooming and Health Care each grew 5%, while Fabric & Home Care grew 3% and Baby, Feminine & Family Care grew 1%.
• Volume trends: Volume excluding acquisitions & divestitures was flat or negative (0% to -1%) across all segments; foreign exchange provided a positive tailwind in every segment ranging from 2% to 4%.

• Gross margin: Decreased 110 basis points to 50.7% of net sales, driven by 120 basis points of unfavorable product mix, 70 basis points of product and packaging investments, 60 basis points of higher tariff costs, 50 basis points of higher restructuring costs, 20 basis points of other items and rounding, 10 basis points of unfavorable foreign exchange, and 10 basis points of higher commodity costs; partially offset by 180 basis points of manufacturing productivity savings and 50 basis points from higher pricing.
• SG&A: Total SG&A spending increased 5% to $17.6B versus the prior year period; SG&A as a % of net sales increased 30 basis points to 26.7%, with marketing spending as a % of net sales up 20 basis points and overhead costs as a % of net sales up 10 basis points (driven by wage inflation and restructuring), partially offset by a 10 basis point decrease in other operating expenses as a % of net sales; productivity-driven cost savings delivered 100 basis points of benefit to SG&A as a % of net sales.
• Operating income: Decreased $298M, or 2%, to $15.8B; operating margin decreased 140 basis points to 24.0% versus the prior year period, due primarily to the decrease in gross margin and increase in restructuring charges in the current year.

• Interest expense: $641M for the period, a decrease of $54M versus the prior year period.
• Interest income: $322M for the period, a decrease of $43M versus the prior year period.
• Other non-operating income/(expense), net: $964M, an increase of $1.1B versus the prior year period, primarily due to the non-cash charge for accumulated foreign currency translation losses from the substantial liquidation of operations in Argentina recorded in the prior year period and the gain from the dissolution of the Glad joint venture business in the current year period.

• Effective tax rate: 20.6% for the nine months ended March 31, 2026, versus 20.5% for the nine months ended March 31, 2025, a modest increase driven primarily by a 100 basis-point increase from lower excess tax benefits of share-based compensation in the current year, partially offset by the prior year charge for accumulated foreign currency translation losses due to the substantial liquidation of operations in Argentina.

• Net earnings: Increased $624M, or 5%, to $13.1B, with the increase in other non-operating income/(expense), net partially offset by a decrease in operating income; foreign exchange had a positive impact of approximately $185M on net earnings for the period, including both transactional and translational impacts.
• Net earnings attributable to P&G: Increased $643M, or 5%, to $13B for the period.
• Diluted EPS: Increased 7% to $5.36 versus the prior year period due to the increase in net earnings; Core EPS (diluted EPS excluding incremental restructuring charges and the gain from the dissolution of the Glad joint venture business) increased 2% to $5.46.

• Segment performance, three months: All five reportable segments posted net sales growth versus the prior year quarter, ranging from 6% (Baby, Feminine & Family Care) to 11% (Beauty); Beauty also led on earnings before income taxes growth at 11%, while Fabric & Home Care posted the slowest earnings before income taxes growth at 3%.
• Segment performance, nine months: Net sales growth over the nine-month period ranged from 1% (Baby, Feminine & Family Care) to 7% (Beauty); Fabric & Home Care net earnings declined 2% year over year for the nine months, the only segment with a net earnings decrease, while Grooming and Health Care net earnings were each flat (0%) for the nine-month period.
• Total Company, three months: Consolidated net sales of $21.2B grew 7%, earnings before income taxes of $5B grew 7%, and net earnings of $4B grew 4%.
• Total Company, nine months: Consolidated net sales of $65.8B grew 4%, earnings before income taxes of $16.4B grew 5%, and net earnings of $13.1B grew 5%.

• Segment net sales: Beauty net sales increased 11% to $3.9B, driven by a 5% increase in unit volume, favorable foreign exchange of 4%, positive impacts of pricing of 1%, and favorable product mix of 1%; organic sales (excluding acquisitions, divestitures, and foreign exchange) increased 7%; global market share of the Beauty segment decreased 0.3 points.
• Category performance: Hair Care net sales increased double digits with organic sales up mid-single digits, led by low-teens growth in Europe, double-digit growth in Latin America, and mid-single-digit growth in Asia Pacific (global market share down 0.5 points); Personal Care net sales increased double digits with organic sales up high single digits, led by mid-teens growth in Europe and high single-digit growth in North America (global market share unchanged); Skin Care net sales increased high single digits — aided by the super-premium SK-II brand — with organic sales also up high single digits including more than 20% growth in Asia Pacific (global market share down 0.8 points).
• Net earnings: Net earnings increased 7% to $579M, partially offset by a 40 basis-point decline in net earnings margin; gross margin declined 210 basis points due to unfavorable product mix, higher commodity costs, and higher cost of tariffs, partially offset by productivity savings; SG&A as a % of net sales decreased due to positive scale impacts of the net sales increase; the higher effective tax rate was driven by unfavorable geographic mix.

• Beauty segment net sales: Net sales increased 7% to $12B, driven by a 4% unit volume increase, 2% positive pricing impact, and 2% favorable foreign exchange, partially offset by 1% unfavorable geographic mix; organic sales (excluding acquisitions, divestitures, and foreign exchange) increased 5%; global market share decreased 0.3 points.
• Category highlights: Hair Care net sales increased high single digits with organic sales up mid-single digits (double-digit growth in Latin America, high single-digit in Europe, mid-single-digit in Asia Pacific, low single-digit decline in North America; market share down 0.6 points); Personal Care net sales increased high single digits with organic sales also up high single digits (mid-teens growth in Europe, high single-digit in Greater China; market share up 0.2 points); Skin Care net sales increased mid-single digits with organic sales also up mid-single digits driven by favorable product mix from super-premium SK-II and pricing in Greater China, partially offset by a volume decrease in Greater China due to competitive activity (market share down 0.7 points).
• Net earnings: Net earnings increased 3% to $2.2B, with net earnings margin declining 80 basis points; gross margin declined 120 basis points due to unfavorable product mix, higher tariff and commodity costs, partially offset by productivity savings; SG&A as a percentage of net sales decreased due to positive scale impacts and lower overhead spending, partially offset by higher marketing spending.

• Net sales: Grooming net sales increased 7% to $1.6B, driven by favorable foreign exchange of 6% and innovation-based pricing of 3% (primarily by North America and Europe), partially offset by a unit volume decrease of 2%; organic sales increased 1%, led by mid-single-digit growth in Latin America and low single-digit growth in North America and Europe, partially offset by a high single-digit decline in Greater China.
• Volume drivers: The volume decrease was driven by IMEA (due to distribution loss), Europe (due to competitive activity), and North America (due to market contraction), partially offset by a volume increase in Latin America (due to increased distribution and innovation); global market share of the Grooming segment decreased 0.4 points.
• Net earnings: Net earnings increased 3% to $331M, with net earnings margin down 70 basis points due to a 40-basis-point gross margin decrease (driven by unfavorable product mix, partially offset by higher pricing and productivity savings) and a higher effective tax rate (driven by unfavorable geographic mix), partially offset by lower SG&A as a percentage of net sales (reflecting positive scale impacts, partially offset by higher marketing spending).

• Grooming net sales: Increased 5% to $5.2B, driven by favorable foreign exchange of 4% and higher pricing of 3% (North America and Europe), partially offset by a unit volume decline of 1% and unfavorable geographic mix of 1%; organic sales increased 1% (excluding acquisitions/divestitures and foreign exchange), with mid-single-digit growth in Latin America and low single-digit growth in Europe partially offset by a mid-single-digit decline in Greater China.
• Volume mix and market share: Unit volume declines in North America (market contraction) and IMEA (distribution loss) were partially offset by Latin America growth (increased distribution); global market share of the Grooming segment decreased 0.4 points.
• Net earnings: Unchanged at $1.2B as the net sales increase was offset by a 100 basis-point decrease in net earnings margin; gross margin declined 80 basis points due to unfavorable product mix (partially offset by higher pricing and productivity savings), SG&A as a percentage of net sales decreased on positive scale impacts (partially offset by higher marketing spending), and the effective tax rate increased due to unfavorable geographic mix.

• Net sales: Health Care net sales increased 7% to $3.1B for the three months ended March 31, 2026, with favorable foreign exchange contributing 5%, higher pricing 2%, and favorable product mix 1%, partially offset by a 2% decrease in unit volume; organic sales (excluding acquisitions, divestitures, and foreign exchange) increased 2%, and global market share of the Health Care segment increased 0.6 points.
• Oral Care: Net sales increased high single digits driven by favorable foreign exchange, innovation-based pricing (North America and Europe), and favorable product mix (growth of power brushes and premium paste); unit volume declined due to Greater China market contraction and competitive activity, partially offset by IMEA; organic sales increased low single digits, with global market share of the Oral Care category up 0.3 points.
• Personal Health Care: Net sales increased mid-single digits driven by favorable foreign exchange, higher pricing (North America), and favorable geographic mix, partially offset by a unit volume decrease in North America and Europe (lower average incidence of cough and cold); organic sales increased low single digits, with global market share of the Personal Health Care category up 0.5 points.
• Net earnings: Net earnings increased 2% to $579M, with net earnings margin down 90 basis points due to a 30 basis-point gross margin decrease (unfavorable product mix, partially offset by higher pricing and productivity savings) and an increase in SG&A as a percentage of net sales driven by higher marketing spending.

• Health Care net sales: Increased 5% to $9.7B, driven by favorable foreign exchange of 3%, favorable product mix of 2%, and higher pricing of 1%, partially offset by a 1% decrease in unit volume; organic sales (excluding acquisitions, divestitures, and foreign exchange) increased 2%, and global market share of the Health Care segment increased 0.5 points.
• Oral Care: Net sales increased mid-single digits due to favorable foreign exchange and favorable product mix (driven by growth of premium paste and power brushes), partially offset by a unit volume decrease led by a decline in Greater China (market contraction and competitive activity); organic sales increased low single digits with a mid-single-digit increase in Europe and a low single-digit increase in North America, partially offset by a low-teens decrease in Greater China; global market share of the Oral Care category was unchanged.
• Personal Health Care: Net sales increased mid-single digits due to higher pricing (driven by North America and Latin America), favorable foreign exchange, and favorable geographic mix, partially offset by a unit volume decrease driven by lower average incidence of cough and cold in North America; organic sales increased low single digits with double-digit growth in Latin America and high single-digit growth in IMEA, partially offset by a low single-digit decline in North America; global market share increased 0.5 points.
• Net earnings: Unchanged at $2.1B as the net sales increase was offset by a 100 basis-point decrease in net earnings margin; gross margin declined 100 basis points due to unfavorable product mix, partially offset by higher pricing and productivity savings, while SG&A as a percentage of net sales decreased due to positive scale impacts of the net sales increase, partially offset by increased marketing spending.

• Segment net sales: Fabric & Home Care net sales increased 7% to $7.4B, driven by favorable foreign exchange of 4%, a unit volume increase of 2%, and higher pricing of 1%; organic sales increased 3% excluding foreign exchange and acquisitions and divestitures. Global market share of the segment was unchanged.
• Fabric Care: Net sales increased mid-single digits driven by favorable foreign exchange and a unit volume increase (led by North America due to innovation); organic sales increased low single digits, with a mid-single-digit increase in North America. Global market share of the Fabric Care category decreased 0.2 points.
• Home Care: Net sales increased high single digits driven by favorable foreign exchange, a unit volume increase, and higher pricing (primarily in North America and Europe); volume growth was led by Europe and Asia Pacific (both due to innovation). Organic sales increased mid-single digits, with a high-single-digit increase in Europe and a low-single-digit increase in North America. Global market share of the Home Care category increased 0.3 points.
• Segment net earnings: Net earnings increased 1% to $1.3B, with net earnings margin down 90 basis points due to a 180 basis-point decrease in gross margin (driven by product investment and higher cost of commodities, partially offset by productivity savings), partially offset by a decrease in SG&A as a percentage of net sales from the positive scale impacts of the net sales increase.

• Net sales: Fabric & Home Care net sales increased 3% to $22.9B, driven by favorable foreign exchange of 2% and higher pricing of 1%; unit volume was unchanged, and organic sales increased 1% excluding foreign exchange and acquisitions and divestitures. Global market share decreased 0.2 points.
• Fabric Care: Net sales increased low single digits driven by favorable foreign exchange; unit volume was unchanged as North America volume growth (due to innovation) offset Europe volume decline (due to competitive activity); organic sales were unchanged as a low single-digit increase in North America was offset by a mid-single-digit decrease in Europe. Global market share decreased 0.6 points.
• Home Care: Net sales increased mid-single digits driven by favorable foreign exchange and higher pricing (primarily in North America and Europe); organic sales increased low single digits; global market share increased 0.4 points.
• Net earnings: Net earnings decreased 2% to $4.4B, reflecting a 90 basis-point decrease in net earnings margin; gross margin decreased 130 basis points driven by unfavorable product mix (partially offset by productivity savings), while SG&A as a percentage of net sales decreased due to positive scale impacts of the net sales increase.

• Segment net sales: Baby, Feminine & Family Care net sales increased 6% to $5.1B for the three months ended March 31, 2026, driven by a unit volume increase of 3% and favorable foreign exchange of 3%; organic sales increased 3% (excluding foreign exchange and acquisitions/divestitures). Global market share decreased 0.3 points.
• Baby Care: Net sales increased high single digits driven by favorable foreign exchange and a unit volume increase; organic sales increased low single digits, with high-teens increases in IMEA and Greater China partially offset by a low single-digit decrease in North America (due to competitive activity). Global market share of the Baby Care category increased 0.2 points.
• Feminine Care: Net sales increased mid-single digits driven by favorable foreign exchange, innovation-based pricing (primarily in North America), and favorable geographic mix, partially offset by a unit volume decline in IMEA and Europe (both due to competitive activity); organic sales increased low single digits. Global market share of the Feminine Care category decreased 0.2 points.
• Family Care & earnings: Family Care net sales increased mid-single digits driven by a unit volume increase (due to retail inventory reduction in the prior year), partially offset by lower pricing (due to merchandising investments); organic sales also increased mid-single digits, while North America market share decreased 0.8 points. Segment net earnings increased 11% to $980M, with net earnings margin up 90 basis points, reflecting a 30-basis-point gross margin increase (lower commodity costs and productivity savings, partially offset by unfavorable product mix) and lower SG&A as a percentage of net sales.

• Net sales: Baby, Feminine & Family Care net sales increased 1% to $15.4B, driven by favorable foreign exchange of 2%, partially offset by a unit volume decline of 1%; organic sales were unchanged excluding foreign exchange and acquisitions and divestitures impacts. Global market share decreased 0.2 points.
• Baby Care: Net sales increased low single digits driven by favorable foreign exchange; unit volume was unchanged as gains in Greater China (innovation), IMEA (market growth), and Europe (distribution gains) offset a North America decrease (competitive activity); organic sales were unchanged as a 20% increase in Greater China and a high single-digit increase in IMEA were offset by a mid-single-digit decrease in North America; global market share increased 0.3 points.
• Feminine Care & Family Care: Feminine Care net sales increased low single digits on favorable foreign exchange, geographic mix, and higher pricing (primarily North America), while unit volume declined across all regions led by IMEA and Europe (competitive activity) and Greater China (market contraction); organic sales were unchanged; global market share was unchanged. Family Care net sales decreased low single digits due to lower pricing from merchandising investments with unit volume unchanged; organic sales also decreased low single digits; North America market share decreased 0.9 points.
• Net earnings: Net earnings increased 1% to $3.1B; net earnings margin was unchanged as lower SG&A as a percentage of net sales was offset by a gross margin decrease of 20 basis points, which was driven by unfavorable product mix partially offset by lower commodity costs and productivity savings; the SG&A improvement reflected lower overhead spending partially offset by higher marketing spending.

• Corporate segment scope: Corporate includes operating and non-operating activities not allocated to specific business segments — incidental businesses, gains/losses on divested brands, financing and investing impacts, employee benefits, asset impairments, and restructuring activities including manufacturing and workforce optimization. The most notable ongoing reconciling item is income taxes, which adjusts the blended statutory rates reflected in reportable segments to the overall Company effective tax rate.
• Q3 results: Corporate net sales increased $27M to $225M for the three months ended March 31, 2026; Corporate net earnings decreased $19M to $181M, driven primarily by current year restructuring charges and adjustments to expected variable compensation payouts in the prior year period, partially offset by the gain from the dissolution of the Glad joint venture business.
• Nine-month results: Corporate net sales increased $107M to $627M for the nine months ended March 31, 2026 due to an increase in net sales of incidental businesses managed at the corporate level; Corporate net earnings increased $588M to $57M, primarily due to restructuring charges related to the substantial liquidation of operations in certain Enterprise Markets, including Argentina, in the prior year period and the dissolution of the Glad joint venture business in the current year period, partially offset by current year restructuring charges.

• Operating cash flow: $14.4B fiscal year to date, an increase of $1.6B versus the prior year period, with net earnings adjusted for non-cash items (depreciation and amortization, share-based compensation expense, deferred income taxes, and (gain)/loss on sale of assets) generating $15.6B of operating cash flow.
• Working capital drag: Working capital and other impacts consumed $1.2B of cash in the period; accounts receivable increased, consuming $186M of cash (days sales outstanding unchanged), and total inventories increased, consuming $346M of cash driven primarily by new product initiatives and increased safety stock levels (days inventory on hand decreased by one day).
• Payables and other items: Trade payables generated $196M of cash; other impacts consumed an additional $877M primarily driven by the payment of the transitional tax related to the 2017 U.S. Tax Act and a reduction in postretirement benefits, partially offset by current year income tax accruals in excess of estimated payments.

• Investing activities: Used $3.4B of cash fiscal year to date, primarily driven by capital expenditures and the settlement of net investment hedges, partially offset by proceeds from the dissolution of the Glad joint venture business.

• Financing activities: Used $8.2B of net cash fiscal year to date, driven primarily by dividends to shareholders and treasury stock purchases, partially offset by a net debt increase.
• Working capital position: As of March 31, 2026, current liabilities exceeded current assets by $10.2B; management anticipates supporting short-term liquidity and operating needs largely through cash generated from operations.
• Debt refinancing capacity: Strong short- and long-term debt ratings are expected to continue enabling 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 (Q3 FY2026): Total Company net sales grew 7% reported, with a 4% foreign exchange headwind and no acquisition/divestiture impact, yielding 3% organic sales growth; at the segment level, Beauty led with 7% organic growth, while Grooming (+1%), Health Care (+2%), Fabric & Home Care (+3%), and Baby, Feminine & Family Care (+3%) each posted modest organic gains.
• Organic sales growth (nine months FY2026): Total Company reported net sales growth of 4%, reduced by 2% from foreign exchange and flat on acquisitions/divestitures, for 2% organic growth; Beauty again led segments at 5% organic, with Baby, Feminine & Family Care flat (0%) after a 1% divestiture benefit offset its 1% reported growth.
• Adjusted free cash flow (nine months FY2026): Operating cash flow of $14.4B less capital spending of ($3.4B) plus $688M of 2017 U.S. Tax Act payments yielded adjusted free cash flow of $11.7B; adjusted free cash flow productivity was 92%, calculated against net earnings as adjusted of $12.8B (GAAP net earnings of $13.1B less a $261M gain from the dissolution of the Glad joint venture).
• Core EPS (Q3 FY2026): Reported diluted EPS of $1.63 was adjusted up $0.07 for incremental restructuring and down $(0.11) for the Glad joint venture gain to arrive at Core EPS of $1.59, up 3% vs. the prior-year Core EPS of $1.54; for the nine months, Core EPS of $5.46 compares to $5.35 in the prior-year period, a 2% increase, while reported diluted EPS grew 7% to $5.36 from $5.03.