One Unsettled Question Sits Under Procter & Gamble Stock

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Procter & Gamble (PG) kept its forecast for fiscal 2027 earnings unchanged on October 22, 2026, even as management raised its estimate of the extra costs the company faces over that year. Management said the outlook includes higher raw material, energy, and transportation costs, and that its cost estimate assumes Brent crude oil at $100 a barrel. You will want to know how high those costs are against P&G's earnings, since it is not settled yet whether the forecast can hold.

How Big Is P&G's Cost Hit For Fiscal 2027?

Management now puts the combined fiscal 2027 hit from input costs, currency, and other items at about 11% of fiscal 2026 core earnings per share, its adjusted measure. This is up from 8% on the July call. P&G still forecasts core earnings per share growth of 0% to 3% for the year, so the company has to make up the whole hit elsewhere to land in that range. During the fiscal Q1 2027 call on October 22, 2026, analysts asked about the raised cost outlook and how P&G would respond to higher oil prices.

P&G's reported gross margin fell to 49.8% in fiscal Q1 2027, down from 51.4% in fiscal Q1 2026. Management has said commodity and freight costs, along with spending to build demand, offset its productivity gains in the quarter.

How Does P&G Plan To Cover The Higher Costs?

Management has said P&G will cover the costs with savings and with price increases that come with new products. The company delivered about $500 million to $550 million of productivity savings before tax in fiscal Q1 2027, and management expects those savings to be heavier in the second half of the year.

So far, P&G has raised prices only a little. The company drew 0.4 points of its sales growth in fiscal Q1 2027 from higher prices, against 2.4 points from higher volume. Management will not say how much more P&G will charge, beyond saying that it prices with innovation and that new products are usually timed with retailers' shelf resets.

Management has not said where in its forecast range earnings will land. It is confident P&G will finish inside its range, but said that after one quarter, the company needs time to work out where. Management has also said large further rises in commodity costs are not built into that range.

P&G Expects Even Higher Costs In Fiscal Q2 2027

Management has said cost headwinds will be materially higher in fiscal Q2 2027, which ends in December, because oil prices have stayed high for longer. It also said everything it knows is already built into its outlook. P&G is expected to report that quarter in January 2027, and its reported gross margin for the period, measured against the same quarter of fiscal 2026, is the figure to watch.

How To Act On PG?

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