Procter & Gamble Beats Wall Street Expectations Thanks to Strong Beauty and Hair-Care Demand

25 October 2025

Tide detergent, a brand owned by Procter & Gamble, is seen for sale in a store in Manhattan, New York City, U.S., June 29, 2022. REUTERS/Andrew Kelly/File Photo

Procter & Gamble, the Cincinnati-based consumer-goods giant known for brands like Tide, Pampers and Olay, reported its fiscal first-quarter results on October 24, 2025, showing revenue of $22.39 billion and adjusted earnings of $1.99 per share, both of which exceeded analyst expectations.

A key driver behind the outperformance was the beauty segment, where volume growth reached 4 percent year-over-year. This marked an acceleration from the prior quarter’s 1 percent increase, highlighting the strength of premium beauty and hair-care offerings such as Pantene and Olay.

Despite the positive topline, P&G did face margin pressure: operating margins fell by around 50 basis points compared with the same quarter a year ago, as cost inflation, trade-tariffs and promotional competition squeezed profitability.

On the tariff front, the company lowered its estimate of annual after-tax tariff costs to roughly $400 million, down from a prior forecast of about $800 million, reflecting a drop in Canadian retaliatory duties on U.S. products and improved trade conditions in that region.

P&G’s management emphasised that while the consumer spending environment remains “not great but stable,” the company is successfully leaning into consumer willingness to pay for trusted, higher-quality beauty and hair-care products even as overall discretionary spending remains challenged.

In China, where broader consumer demand is soft, the company still delivered double-digit growth in its baby care business and premium brands a sign that premiumisation and selective growth markets remain meaningful.

Moreover, the company continues to manage its global portfolio by exiting lower-margin categories and geographies such as laundry bars in India and the Philippines and winding down manufacturing operations in Pakistan, shifting to a distribution-only model. These moves are part of a broader cost-structure optimisation amid macro uncertainty.

From an investor’s standpoint the beat offers encouragement: P&G proved that even in an environment of muted consumer confidence and cost pressures, demand for beauty and grooming products can hold up. It also suggests that consumer-goods companies with strong brands and premium-oriented portfolios may be better insulated than most in this challenging macro environment.

However, the caveats are important. Margin declines, competitive promotions especially in fabric and home care, and broader global economic headwinds mean the company cannot be complacent. The premium-product pocket may buoy performance for now, but sustained growth will require effective cost management, brand innovation, and adaptation to shifting consumer behaviours across income segments.

In sum, Procter & Gamble’s latest results reflect both resilience and strategic adaptation. The strong showing in beauty and hair-care underscores how top-tier consumer-brands can still thrive amid pressure but the broader terrain remains uneven and demands ongoing vigilance.