Document: SEC Filing

Company: Procter & Gamble Co.
Ticker: PG
CIK: 80424
Form Type: 10-Q
Filing Date: 2026-01-23
Accession Number: 0000080424-26-000011
Source: 10-Q_2026-01-23_0000080424-26-000011.txt

---

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM
10-Q

(Mark one)
x True QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended
December 31, 2025
OR
o False TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from
                   
 to
                   
 

THE
PROCTER & GAMBLE CO
MPANY
(Exact name of registrant as specified in its charter)
 

Ohio OH 1-434 31-0411980
(State of Incorporation) (Commission File Number) (I.R.S. Employer Identification Number)
One Procter & Gamble Plaza Cincinnati OH
One Procter & Gamble Plaza , Cincinnati , Ohio 45202
(Address of principal executive offices) (Zip Code)

(
513
)
983-1100

(Registrant’s telephone number, including area code)
 

Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol Name of each exchange on which registered
Common Stock, without Par Value PG NYSE
0.110% Notes due 2026 PG26D NYSE
3.250% EUR Notes due 2026 PG26F NYSE
4.875% EUR Notes due May 2027 PG27A NYSE
1.200% Notes due 2028 PG28 NYSE
3.150% EUR Notes due 2028 PG28B NYSE
1.250% Notes due 2029 PG29B NYSE
1.800% Notes due 2029 PG29A NYSE
6.250% GBP Notes due January 2030 PG30 NYSE
0.350% Notes due 2030 PG30C NYSE
0.230% Notes due 2031 PG31A NYSE
3.250% EUR Notes due 2031 PG31B NYSE
5.250% GBP Notes due January 2033 PG33 NYSE
2.900% Notes due 2033 PG33B NYSE
3.200% EUR Notes due 2034 PG34C NYSE
1.875% Notes due 2038 PG38 NYSE
0.900% Notes due 2041 PG41 NYSE
3.650% Notes due 2045 PG45 NYSE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes

þ
No
o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes

þ
No
o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer þ Accelerated filer ¨
Non-accelerated filer ¨ Smaller reporting company ¨ False
Emerging growth company ¨ False

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
o
No
þ

False

There were
2,324,000,685
shares of Common Stock outstanding as of December 31, 2025.
FORM 10-Q TABLE OF CONTENTS Page
PART I Item 1. Financial Statements 1
Consolidated Statements of Earnings 1
Consolidated Statements of Comprehensive Income 1
Consolidated Balance Sheets 2
Consolidated Statements of Shareholders' Equity 3
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6
Note 1: Basis of Presentation 6
Note 2: New Accounting Pronouncements and Policies 6
Note 3: Segment Information 6
Note 4: Goodwill and Intangible Assets 9
Note 5: Earnings Per Share 10
Note 6: Share-Based Compensation and Postretirement Benefits 10
Note 7: Risk Management Activities and Fair Value Measurements 10
Note 8: Accumulated Other Comprehensive Income/(Loss) 12
Note 9: Commitments and Contingencies 12
Note 10: Supplier Finance Programs 13
Note 11: Restructuring Program 13
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 14
Item 3. Quantitative and Qualitative Disclosures About Market Risk 29
Item 4. Controls and Procedures 29
PART II Item 1. Legal Proceedings 30
Item 1A. Risk Factors 30
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities 30
Item 5. Other Information 30
Item 6. Exhibits 31
Signature 31

The Procter & Gamble Company 1
PART I. FINANCIAL INFORMATION 
Item 1. Financial Statements

THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
Three Months Ended December 31 Six Months Ended December 31
Amounts in millions except per share amounts 2025 2024 2025 2024
NET SALES $ 22,208 $ 21,882 $ 44,594 $ 43,619
Cost of products sold 10,834 10,418 21,721 20,839
Selling, general and administrative expense 6,008 5,723 11,651 11,242
OPERATING INCOME 5,366 5,741 11,222 11,538
Interest expense ( 220 ) ( 240 ) ( 417 ) ( 478 )
Interest income 115 119 222 254
Other non-operating income/(expense), net 160 224 427 ( 330 )
EARNINGS BEFORE INCOME TAXES 5,421 5,845 11,455 10,985
Income taxes 1,090 1,187 2,343 2,339
NET EARNINGS 4,331 4,659 9,112 8,646
Less: Net earnings attributable to noncontrolling interests 12 29 42 56
NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE $ 4,319 $ 4,630 $ 9,070 $ 8,589
NET EARNINGS PER COMMON SHARE (1)
Basic $ 1.82 $ 1.94 $ 3.82 $ 3.59
Diluted $ 1.78 $ 1.88 $ 3.73 $ 3.49

(1)
Basic net earnings per common share and Diluted net earnings per common share are calculated on Net earnings attributable to Procter & Gamble.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Three Months Ended December 31 Six Months Ended December 31
Amounts in millions 2025 2024 2025 2024
NET EARNINGS $ 4,331 $ 4,659 $ 9,112 $ 8,646
OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX
Foreign currency translation 45 ( 770 ) 25 256
Unrealized gains/(losses) on investment securities 2 — 1 1
Unrealized gains/(losses) on defined benefit postretirement plans ( 2 ) 24 1 3
TOTAL OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX 46 ( 747 ) 27 260
TOTAL COMPREHENSIVE INCOME 4,377 3,912 9,139 8,906
Less: Comprehensive income attributable to noncontrolling interests 10 26 34 54
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO PROCTER & GAMBLE $ 4,367 $ 3,887 $ 9,105 $ 8,852

See accompanying Notes to Consolidated Financial Statements.
2 The Procter & Gamble Company
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Amounts in millions December 31, 2025 June 30, 2025
Assets
CURRENT ASSETS
Cash and cash equivalents $ 10,825 $ 9,556
Accounts receivable 6,279 6,185
INVENTORIES
Materials and supplies 2,139 2,022
Work in process 1,007 1,012
Finished goods 4,672 4,516
Total inventories 7,817 7,551
Prepaid expenses and other current assets 1,666 2,100
TOTAL CURRENT ASSETS 26,588 25,392
PROPERTY, PLANT AND EQUIPMENT, NET 24,487 23,897
GOODWILL 41,665 41,650
TRADEMARKS AND OTHER INTANGIBLE ASSETS, NET 21,737 21,910
OTHER NONCURRENT ASSETS 12,809 12,381
TOTAL ASSETS $ 127,286 $ 125,231
Liabilities and Shareholders' Equity
CURRENT LIABILITIES
Accounts payable $ 15,173 $ 15,227
Accrued and other liabilities 10,463 11,318
Debt due within one year 11,062 9,513
TOTAL CURRENT LIABILITIES 36,699 36,058
LONG-TERM DEBT 25,577 24,995
DEFERRED INCOME TAXES 5,974 5,774
OTHER NONCURRENT LIABILITIES 5,719 6,120
TOTAL LIABILITIES 73,969 72,946
SHAREHOLDERS’ EQUITY
Preferred stock 767 777
Common stock – shares issued – December 2025 4,009.2
June 2025 4,009.2 4,009 4,009
Additional paid-in capital 69,010 68,770
Reserve for ESOP debt retirement ( 637 ) ( 672 )
Accumulated other comprehensive loss ( 12,108 ) ( 12,143 )
Treasury stock ( 141,981 ) ( 138,702 )
Retained earnings 133,981 129,973
Noncontrolling interest 276 272
TOTAL SHAREHOLDERS’ EQUITY 53,317 52,284
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 127,286 $ 125,231

See accompanying Notes to Consolidated Financial Statements.
The Procter & Gamble Company 3
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Three Months Ended December 31, 2025
Dollars in millions; shares in thousands Common Stock Preferred Stock Additional Paid-In Capital Reserve for ESOP Debt Retirement Accumulated Other Comprehensive Income/(Loss) Treasury Stock Retained Earnings Noncontrolling Interest Total Shareholders' Equity
Shares Amount
BALANCE SEPTEMBER 30, 2025 2,336,734 $ 4,009 $ 770 $ 68,917 ($ 637 ) ($ 12,156 ) ($ 139,845 ) $ 132,212 $ 281 $ 53,551
Net earnings 4,319 12 4,331
Other comprehensive income/(loss) 48 ( 2 ) 46
Dividends and dividend equivalents ($ 1.0568 per share):
Common ( 2,478 ) ( 2,478 )
Preferred ( 73 ) ( 73 )
Treasury stock purchases ( 15,566 ) ( 2,271 ) ( 2,271 )
Employee stock plans 2,350 92 132 224
Preferred stock conversions 483 ( 3 ) — 3 —
ESOP debt impacts — — —
Noncontrolling interest, net — ( 14 ) ( 14 )
BALANCE DECEMBER 31, 2025 2,324,001 $ 4,009 $ 767 $ 69,010 ($ 637 ) ($ 12,108 ) ($ 141,981 ) $ 133,981 $ 276 $ 53,317

Six Months Ended December 31, 2025
Dollars in millions; shares in thousands Common Stock Preferred Stock Additional Paid-In Capital Reserve for ESOP Debt Retirement Accumulated Other Comprehensive Income/(Loss) Treasury Stock Retained Earnings Noncontrolling Interest Total Shareholders' Equity
Shares Amount
BALANCE JUNE 30, 2025 2,341,994 $ 4,009 $ 777 $ 68,770 ($ 672 ) ($ 12,143 ) ($ 138,702 ) $ 129,973 $ 272 $ 52,284
Net earnings 9,070 42 9,112
Other comprehensive income/(loss) 35 ( 8 ) 27
Dividends and dividend equivalents ($ 2.1136 per share):
Common ( 4,960 ) ( 4,960 )
Preferred ( 146 ) ( 146 )
Treasury stock purchases ( 23,591 ) ( 3,529 ) ( 3,529 )
Employee stock plans 4,304 238 242 480
Preferred stock conversions 1,294 ( 10 ) 1 9 —
ESOP debt impacts 35 44 79
Noncontrolling interest, net — ( 30 ) ( 30 )
BALANCE DECEMBER 31, 2025 2,324,001 $ 4,009 $ 767 $ 69,010 ($ 637 ) ($ 12,108 ) ($ 141,981 ) $ 133,981 $ 276 $ 53,317

See accompanying Notes to Consolidated Financial Statements.
4 The Procter & Gamble Company
Three Months Ended December 31, 2024
Dollars in millions; shares in thousands Common Stock Preferred Stock Additional Paid-In Capital Reserve for ESOP Debt Retirement Accumulated Other Comprehensive Income/(Loss) Treasury Stock Retained Earnings Noncontrolling Interest Total Shareholders' Equity
Shares Amount
BALANCE SEPTEMBER 30, 2024 2,355,042 $ 4,009 $ 791 $ 68,102 ($ 707 ) ($ 10,893 ) ($ 134,823 ) $ 125,361 $ 300 $ 52,141
Net earnings 4,630 29 4,659
Other comprehensive income/(loss) ( 744 ) ( 3 ) ( 747 )
Dividends and dividend equivalents ($ 1.0065 per share):
Common ( 2,375 ) ( 2,375 )
Preferred ( 72 ) ( 72 )
Treasury stock purchases ( 14,716 ) ( 2,520 ) ( 2,520 )
Employee stock plans 4,057 181 228 408
Preferred stock conversions 469 ( 3 ) — 3 —
ESOP debt impacts — — —
Noncontrolling interest, net — ( 51 ) ( 51 )
BALANCE DECEMBER 31, 2024 2,344,852 $ 4,009 $ 788 $ 68,283 ($ 707 ) ($ 11,637 ) ($ 137,112 ) $ 127,544 $ 275 $ 51,443

Six Months Ended December 31, 2024
Dollars in millions; shares in thousands Common Stock Preferred Stock Additional Paid-In Capital Reserve for ESOP Debt Retirement Accumulated Other Comprehensive Income/(Loss) Treasury Stock Retained Earnings Noncontrolling Interest Total Shareholders' Equity
Shares Amount
BALANCE JUNE 30, 2024 2,357,051 $ 4,009 $ 798 $ 67,684 ($ 737 ) ($ 11,900 ) ($ 133,379 ) $ 123,811 $ 272 $ 50,559
Net earnings 8,589 56 8,646
Other comprehensive income/(loss) 263 ( 3 ) 260
Dividends and dividend equivalents ($ 2.0130 per share):
Common ( 4,754 ) ( 4,754 )
Preferred ( 144 ) ( 144 )
Treasury stock purchases ( 26,269 ) ( 4,462 ) ( 4,462 )
Employee stock plans 12,827 598 720 1,318
Preferred stock conversions 1,243 ( 10 ) 1 9 —
ESOP debt impacts 30 41 71
Noncontrolling interest, net — ( 51 ) ( 51 )
BALANCE DECEMBER 31, 2024 2,344,852 $ 4,009 $ 788 $ 68,283 ($ 707 ) ($ 11,637 ) ($ 137,112 ) $ 127,544 $ 275 $ 51,443

See accompanying Notes to Consolidated Financial Statements.
The Procter & Gamble Company 5
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended December 31
Amounts in millions 2025 2024
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD $ 9,556 $ 9,482
OPERATING ACTIVITIES (1)
Net earnings 9,112 8,646
Depreciation and amortization 1,563 1,434
Share-based compensation expense 262 241
Deferred income taxes 196 221
(Gain)/loss on sale of assets 1 787
Change in accounts receivable ( 92 ) ( 262 )
Change in inventories ( 255 ) ( 170 )
Change in accounts payable 239 ( 286 )
Other ( 645 ) ( 1,484 )
TOTAL OPERATING ACTIVITIES 10,380 9,127
INVESTING ACTIVITIES
Capital expenditures ( 2,367 ) ( 1,918 )
Proceeds from asset sales 16 47
Acquisitions, net of cash acquired ( 5 ) ( 6 )
Other investing activity ( 408 ) ( 153 )
TOTAL INVESTING ACTIVITIES ( 2,763 ) ( 2,029 )
FINANCING ACTIVITIES
Dividends to shareholders ( 5,093 ) ( 4,886 )
Additions to short-term debt with original maturities of more than three months 4,180 5,905
Reductions in short-term debt with original maturities of more than three months ( 3,270 ) ( 571 )
Net additions/(reductions) to other short-term debt ( 471 ) ( 2,705 )
Additions to long-term debt 2,652 995
Reductions in long-term debt ( 1,005 ) ( 1,478 )
Treasury stock purchases ( 3,528 ) ( 4,449 )
Impact of stock options and other 208 985
TOTAL FINANCING ACTIVITIES ( 6,327 ) ( 6,205 )
EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH ( 21 ) ( 144 )
CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 1,269 748
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD $ 10,825 $ 10,230

(1)
Certain prior period amounts within Operating Activities have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the previously reported Total Operating Activities.
See accompanying Notes to Consolidated Financial Statements.
6 The Procter & Gamble Company
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1.
Basis of Presentation
The accompanying unaudited Consolidated Financial Statements of The Procter & Gamble Company and subsidiaries ("the Company," "Procter & Gamble," "P&G," "we" or "our") should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025. We have prepared these statements in conformity with accounting principles generally accepted in the United States (U.S. GAAP) pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC) for interim financial information. Note that certain columns and rows may not add due to rounding. In the opinion of management, the accompanying Consolidated Financial 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, the results of operations included in such financial statements may not necessarily be indicative of annual results.
2.
New Accounting Pronouncements and Policies
In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2023-09, “Income Taxes: Improvements to Income Tax Disclosures”. This guidance requires consistent categories and greater disaggregation of information in the rate reconciliation and disclosures of income taxes paid by jurisdiction. This amendment is effective for our fiscal year ending June 30, 2026. This guidance will require additional disclosures in the Income Tax footnote but will not have a material impact on our Consolidated Financial Statements.
In November 2024, the FASB issued ASU No. 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures: Disaggregation of Income Statement Expenses”. This guidance requires disclosures about significant expense categories, including but not limited to, inventory purchases, employee compensation, depreciation, amortization and selling expenses. This amendment is effective for our fiscal year ending June 30, 2028 and our interim periods within the fiscal year ending June 30, 2029. We are currently assessing the impact of this guidance on our disclosures.
In September 2025, the FASB issued ASU No. 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software: Targeted Improvements to the Accounting for Internal-Use Software”. This guidance amends the accounting for and disclosure of software costs. This amendment is effective for our fiscal year ending June 30, 2029 and the interim periods within that fiscal year. We are currently assessing the impact of this guidance on our Consolidated Financial Statements.
In December 2025, the FASB issued ASU No. 2025-10, “Accounting for Government Grants Received by Business Entities”. This amendment provides guidance on the recognition, measurement, and presentation of government grants. This amendment is effective for our fiscal year ending June 30, 2030 and the interim periods within that fiscal year. We are currently assessing the impact of this guidance on our Consolidated Financial Statements.
No other new accounting pronouncement issued or effective during the fiscal year had, or is expected to have, a material impact on our Consolidated Financial Statements.
3.
Segment Information
Under U.S. GAAP, our operating segments are aggregated into
five
reportable segments: 1) Beauty, 2) Grooming, 3) Health Care, 4) Fabric & Home Care and 5) Baby, Feminine & Family Care. Our
five
reportable segments are comprised of:
•
Beauty
: Hair Care (Conditioners, Shampoos, Styling Aids, Treatments); Personal Care (Antiperspirants and Deodorants, Personal Cleansing); Skin Care (Facial Moisturizers, Cleaners and Treatments);
•
Grooming
: Grooming (Appliances, Female Blades & Razors, Male Blades & Razors, Pre- and Post-Shave Products, Other Grooming);
•
Health Care
: Oral Care (Toothbrushes, Toothpastes, Other Oral Care); Personal Health Care (Gastrointestinal, Pain Relief, Rapid Diagnostics, Respiratory, Vitamins/Minerals/Supplements, Other Personal Health Care);
•
Fabric & Home Care
: Fabric Care (Fabric Enhancers, Laundry Additives, Laundry Detergents); Home Care (Air Care, Dish Care, P&G Professional, Surface Care); and
•
Baby, Feminine & Family Care
: Baby Care (Baby Wipes, Taped Diapers and Pants); Feminine Care (Adult Incontinence, Menstrual Care); Family Care (Paper Towels, Tissues, Toilet Paper).
Amounts in millions of dollars except per share amounts or as otherwise specified.
The Procter & Gamble Company 7
Operating segments as a percentage of consolidated net sales are as follows:
% of Net sales by operating segment (1)
Three Months Ended December 31 Six Months Ended December 31
2025 2024 2025 2024
Fabric Care 23 % 23 % 23 % 23 %
Home Care 12 % 12 % 12 % 12 %
Baby Care 9 % 9 % 9 % 9 %
Hair Care 9 % 9 % 9 % 9 %
Oral Care 9 % 9 % 8 % 8 %
Family Care 8 % 9 % 8 % 9 %
Grooming 8 % 8 % 8 % 8 %
Personal Health Care 7 % 6 % 7 % 7 %
Feminine Care 6 % 6 % 6 % 6 %
Personal Care 5 % 5 % 6 % 6 %
Skin Care 4 % 4 % 4 % 3 %
Total 100 % 100 % 100 % 100 %

(1)
% of Net sales by operating segment excludes sales recorded in Corporate.
The following is a summary of reportable segment results:
Three Months Ended December 31, 2025
Beauty Grooming Health Care Fabric & Home Care Baby, Feminine & Family Care Corporate Total Company
Net sales $ 4,039 $ 1,794 $ 3,406 $ 7,686 $ 5,123 $ 160 $ 22,208
Cost of products sold ( 1,557 ) ( 732 ) ( 1,373 ) ( 4,064 ) ( 2,762 ) ( 346 ) ( 10,834 )
Selling, general and administrative expense ( 1,490 ) ( 531 ) ( 1,020 ) ( 1,661 ) ( 1,023 ) ( 284 ) ( 6,008 )
Other segment items (1) — — ( 3 ) — — 58 55
Earnings/(loss) before income taxes 992 531 1,009 1,961 1,338 ( 412 ) 5,421
Net earnings/(loss) $ 763 $ 417 $ 770 $ 1,521 $ 1,020 $ ( 161 ) $ 4,331
Other segment information
Depreciation and amortization $ 103 $ 78 $ 108 $ 186 $ 207 $ 121 $ 803
Capital expenditures $ 86 $ 128 $ 139 $ 318 $ 361 $ 135 $ 1,167

(1)
Other segment items for each reportable segment includes interest expense, interest income and certain other non-operating income/(expense).
Amounts in millions of dollars except per share amounts or as otherwise specified.
8 The Procter & Gamble Company
Three Months Ended December 31, 2024
Beauty Grooming Health Care Fabric & Home Care Baby, Feminine & Family Care Corporate Total Company
Net sales $ 3,848 $ 1,752 $ 3,249 $ 7,575 $ 5,298 $ 159 $ 21,882
Cost of products sold ( 1,462 ) ( 681 ) ( 1,284 ) ( 3,936 ) ( 2,820 ) ( 235 ) ( 10,418 )
Selling, general and administrative expense ( 1,390 ) ( 504 ) ( 991 ) ( 1,649 ) ( 1,014 ) ( 175 ) ( 5,723 )
Other segment items (1) — — — ( 1 ) — 104 104
Earnings/(loss) before income taxes 996 568 974 1,989 1,464 ( 146 ) 5,845
Net earnings/(loss) $ 780 $ 459 $ 758 $ 1,567 $ 1,119 $ ( 24 ) $ 4,659
Other segment information
Depreciation and amortization $ 101 $ 77 $ 101 $ 180 $ 202 $ 46 $ 706
Capital expenditures $ 69 $ 86 $ 135 $ 267 $ 261 $ 107 $ 925

(1)
Other segment items for each reportable segment includes interest expense, interest income and certain other non-operating income/(expense).
Six Months Ended December 31, 2025
Beauty Grooming Health Care Fabric & Home Care Baby, Feminine & Family Care Corporate Total Company
Net sales $ 8,182 $ 3,611 $ 6,626 $ 15,479 $ 10,294 $ 402 $ 44,594
Cost of products sold ( 3,181 ) ( 1,475 ) ( 2,716 ) ( 8,208 ) ( 5,532 ) ( 607 ) ( 21,721 )
Selling, general and administrative expense ( 2,877 ) ( 1,020 ) ( 1,965 ) ( 3,268 ) ( 1,978 ) ( 544 ) ( 11,651 )
Other segment items (1) — — 3 — — 230 233
Earnings/(loss) before income taxes 2,124 1,117 1,947 4,003 2,784 ( 520 ) 11,455
Net earnings/(loss) $ 1,643 $ 881 $ 1,489 $ 3,100 $ 2,125 $ ( 125 ) $ 9,112
Other segment information
Depreciation and amortization $ 205 $ 158 $ 213 $ 371 $ 413 $ 204 $ 1,563
Capital expenditures $ 160 $ 260 $ 248 $ 600 $ 635 $ 463 $ 2,367

(1)
Other segment items for each reportable segment includes interest expense, interest income and certain other non-operating income/(expense).
Six Months Ended December 31, 2024
Beauty Grooming Health Care Fabric & Home Care Baby, Feminine & Family Care Corporate Total Company
Net sales $ 7,741 $ 3,475 $ 6,397 $ 15,285 $ 10,400 $ 322 $ 43,619
Cost of products sold ( 2,956 ) ( 1,387 ) ( 2,543 ) ( 7,941 ) ( 5,550 ) ( 463 ) ( 20,839 )
Selling, general and administrative expense ( 2,722 ) ( 999 ) ( 1,926 ) ( 3,277 ) ( 2,003 ) ( 315 ) ( 11,242 )
Other segment items (1) ( 1 ) — — — — ( 553 ) ( 554 )
Earnings/(loss) before income taxes 2,063 1,090 1,928 4,066 2,847 ( 1,009 ) 10,985
Net earnings/(loss) $ 1,620 $ 885 $ 1,499 $ 3,188 $ 2,185 $ ( 731 ) $ 8,646
Other segment information
Depreciation and amortization $ 200 $ 160 $ 198 $ 358 $ 406 $ 112 $ 1,434
Capital expenditures $ 118 $ 181 $ 218 $ 471 $ 459 $ 472 $ 1,918

(1)
Other segment items for each reportable segment includes interest expense, interest income and certain other non-operating income/(expense). Corporate includes non-operating losses comprised primarily of a non-cash charge of $
752
for accumulated foreign currency translation losses due to the substantial liquidation of operations in Argentina.
Amounts in millions of dollars except per share amounts or as otherwise specified.
The Procter & Gamble Company 9
The Chief Operating Decision Maker (CODM) does not use assets by segment to evaluate performance or allocate resources. Therefore, we do not disclose assets by segment.
4.
Goodwill and Intangible Assets
Goodwill is allocated by reportable segment as follows:
Beauty Grooming Health Care Fabric & Home Care Baby, Feminine & Family Care Total Company
GOODWILL AT JUNE 30, 2025 $ 14,229 $ 12,993 $ 7,941 $ 1,848 $ 4,640 $ 41,650
Acquisitions and divestitures — — — — — —
Translation and other 5 7 ( 2 ) 2 3 15
GOODWILL AT DECEMBER 31, 2025 $ 14,234 $ 12,999 $ 7,939 $ 1,850 $ 4,643 $ 41,665

Goodwill increased from June 30, 2025, primarily due to currency translation.
Identifiable intangible assets at December 31, 2025, were comprised of:
Gross Carrying Amount Accumulated Amortization
Intangible assets with determinable lives $ 9,183 $ ( 7,157 )
Intangible assets with indefinite lives 19,710 —
Total identifiable intangible assets $ 28,893 $ ( 7,157 )

Intangible assets with determinable lives consist of brands, patents, technology and customer relationships. The intangible assets with indefinite lives primarily consist of brands. The amortization expense of determinable-lived intangible assets for the three months ended December 31, 2025 and 2024, was $
77
and $
80
, respectively. For the six months ended December 31, 2025 and 2024, amortization expense was $
156
and $
163
, respectively.
Goodwill and indefinite-lived intangible assets are not amortized but are tested at least annually for impairment. We use the income method to estimate the fair value of these assets, which is based on forecasts of the expected future cash flows attributable to the respective assets. When appropriate, the market approach, which leverages comparable company revenue and earnings multiples, is weighted with the income approach to estimate fair value. If the resulting fair value is less than the asset's carrying value, that difference represents an impairment. Our annual impairment testing for goodwill and indefinite-lived intangible assets occurs during the three months ended December 31. Other than our Gillette indefinite-lived intangible asset, our goodwill reporting units and indefinite-lived intangible assets have fair values that significantly exceed their underlying carrying values.
Based on our 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 December 31, 2025, the carrying value of the Gillette indefinite-lived intangible asset was $
12.8
billion. Adverse changes in the business or in the macroeconomic environment, including foreign currency devaluation, increasing global inflation, or market contraction from an economic recession, could reduce the underlying cash flows used to estimate the fair value of the Gillette indefinite-lived intangible asset and trigger an impairment charge.
The most significant assumptions utilized in the determination of the estimated fair value of the Gillette indefinite-lived intangible asset are the net sales growth rates (including residual growth rate), discount rate and royalty rate.
Net sales growth rates could be negatively impacted by reductions or changes in demand for our Gillette products, which may be caused by, among other things: changes in the use and frequency of grooming products, shifts in demand away from one or more of our higher priced products to lower priced products or potential supply chain constraints. In addition, relative global and country/regional macroeconomic factors could result in additional and prolonged devaluation of other countries' currencies relative to the U.S. dollar. The residual growth rate represents the expected rate at which the Gillette brand is expected to grow beyond the shorter-term business planning period. The residual growth rate utilized in our fair value estimates is consistent with the brand operating plans and approximates expected long-term category market growth rates. The residual growth rate depends on overall market growth rates, the competitive environment, inflation, relative currency exchange rates and business activities that impact market share. As a result, the residual growth rate could be adversely impacted by a sustained deceleration in category growth, grooming habit changes, devaluation of currencies against the U.S. dollar or an increased competitive environment.
The discount rate is based on a weighted average cost of capital that is likely to be expected by a market participant, including consideration of both debt and equity components of the capital structure. Our discount rate may be impacted by adverse changes in the macroeconomic environment, volatility in the equity and debt markets or other country specific factors, such as further devaluation of currencies against the U.S. dollar. Spot rates as of the fair value measurement date are utilized in our fair value estimates for cash flows outside the U.S.
Amounts in millions of dollars except per share amounts or as otherwise specified.
10 The Procter & Gamble Company
The royalty rate used to determine the estimated fair value for the Gillette indefinite-lived intangible asset is driven by historical and estimated future profitability of the underlying Gillette business. The royalty rate may be impacted by significant adverse changes in long-term operating margins.
We performed a sensitivity analysis for the Gillette indefinite-lived intangible asset as part of our annual impairment testing during the three months ended December 31, 2025, utilizing reasonably possible changes in the assumptions for the discount rate, the short-term and residual growth rates and the royalty rate to demonstrate the potential impacts to estimated fair values.
The table below provides, in isolation, the estimated fair value impacts related to a 25 basis-point increase in the discount rate, a 25 basis-point decrease in our short-term and residual growth rates or a 50 basis-point decrease in our royalty rate.
Approximate Percent Change in Estimated Fair Value
+25 bps Discount Rate -25 bps Growth Rates -50 bps Royalty Rate
Gillette indefinite-lived intangible asset ( 5 ) % ( 5 ) % ( 4 ) %

5.
Earnings Per Share
Basic net earnings per common share are calculated by dividing Net earnings attributable to Procter & Gamble less preferred dividends by the weighted average number of common shares outstanding during the period. Diluted net earnings per common share are calculated by dividing Net earnings attributable to Procter & Gamble by the diluted weighted average number of common shares outstanding during the period. The diluted shares include the dilutive effect of stock options and other share-based awards based on the treasury stock method and the assumed conversion of preferred stock.
Net earnings per common share were calculated as follows:
CONSOLIDATED AMOUNTS Three Months Ended December 31 Six Months Ended December 31
2025 2024 2025 2024
Net earnings attributable to P&G (Diluted) $ 4,319 $ 4,630 $ 9,070 $ 8,589
Less: Preferred dividends 73 72 146 144
Net earnings attributable to P&G available to common shareholders (Basic) $ 4,247 $ 4,558 $ 8,924 $ 8,445
SHARES IN MILLIONS
Basic weighted average common shares outstanding 2,335.3 2,351.9 2,338.7 2,354.1
Add effect of dilutive securities:
Stock options and other unvested equity awards (1) 20.0 34.9 22.7 36.4
Convertible preferred shares (2) 68.7 71.3 69.0 71.6
Diluted weighted average common shares outstanding 2,424.0 2,458.1 2,430.4 2,462.1
NET EARNINGS PER COMMON SHARE
Basic $ 1.82 $ 1.94 $ 3.82 $ 3.59
Diluted $ 1.78 $ 1.88 $ 3.73 $ 3.49

(1)
For the three months ended December 31, 2025 and 2024, the weighted average of stock options that were antidilutive and not included in the diluted net earnings per share calculation were
23
million and
8
million, respectively. For the six months ended December 31, 2025 and 2024, the weighted average of stock options that were antidilutive and not included in the diluted net earnings per share calculation were
19
million and
4
million, respectively.
(2)
An overview of preferred shares can be found in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025.
6.
Share-Based Compensation and Postretirement Benefits
The following table provides a summary of our share-based compensation expense and postretirement benefit impacts:
Three Months Ended December 31 Six Months Ended December 31
2025 2024 2025 2024
Share-based compensation expense $ 140 $ 136 $ 262 $ 241
Net periodic benefit cost for pension benefits 26 26 65 63
Net periodic benefit (credit) for other retiree benefits ( 149 ) ( 180 ) ( 302 ) ( 360 )

7.
Risk Management Activities and Fair Value Measurements
As a multinational company with diverse product offerings, we are exposed to market risks, such as changes in interest rates, currency exchange rates and commodity prices. There have been no significant changes in our risk management policies or activities during the six months ended December 31, 2025.
Amounts in millions of dollars except per share amounts or as otherwise specified.
The Procter & Gamble Company 11
The Company has not changed its valuation techniques used in measuring the fair value of any financial assets and liabilities during the period. The Company recognizes transfers between levels within the fair value hierarchy, if any, at the end of each quarter. There were no transfers between levels during the periods presented. Also, there was no significant activity within the Level 3 assets and liabilities during the periods presented. There were no significant assets or liabilities that were re-measured at fair value on a non-recurring basis during the periods presented.
Cash equivalents were $
9.4
billion and $
8.3
billion as of December 31, 2025 and June 30, 2025, respectively, and are classified as Level 1 within the fair value hierarchy. The Company had no other material investments in debt or equity securities during the periods presented.
The fair value of long-term debt was $
31.3
billion and $
29.5
billion as of December 31, 2025 and June 30, 2025, respectively. This includes the current portion of long-term debt instruments ($
6.4
billion and $
5.3
billion as of December 31, 2025 and June 30, 2025, respectively). Certain long-term debt (debt designated as a fair value hedge) is recorded at fair value. All other long-term debt is recorded at amortized cost but is measured at fair value for disclosure purposes. We consider our debt to be Level 2 in the fair value hierarchy. Fair values are generally estimated based on quoted market prices for identical or similar instruments.
Disclosures about Financial Instruments
The notional amounts and fair values of financial instruments used in hedging transactions as of December 31, 2025 and June 30, 2025, are as follows:
Notional Amount Fair Value Asset Fair Value (Liability)
December 31, 2025 June 30, 2025 December 31, 2025 June 30, 2025 December 31, 2025 June 30, 2025
DERIVATIVES IN FAIR VALUE HEDGING RELATIONSHIPS
Interest rate contracts $ 5,336 $ 3,280 $ — $ — $ ( 207 ) $ ( 201 )
DERIVATIVES IN NET INVESTMENT HEDGING RELATIONSHIPS
Foreign currency interest rate contracts $ 11,992 $ 11,874 $ 3 $ — $ ( 502 ) $ ( 860 )
TOTAL DERIVATIVES DESIGNATED AS HEDGING INSTRUMENTS $ 17,328 $ 15,154 $ 3 $ — $ ( 709 ) $ ( 1,061 )
DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS
Foreign currency contracts $ 4,381 $ 3,576 $ 30 $ 19 $ ( 4 ) $ —
TOTAL DERIVATIVES AT FAIR VALUE $ 21,709 $ 18,730 $ 33 $ 19 $ ( 712 ) $ ( 1,062 )

The fair value of the interest rate derivative asset/(liability) directly offsets the cumulative amount of the fair value hedging adjustment included in the carrying amount of the underlying debt obligation. The carrying amount of the underlying debt obligation, which includes the unamortized discount or premium and the fair value adjustment, was $
5.1
billion and $
3.1
billion as of December 31, 2025 and June 30, 2025, respectively. In addition to the foreign currency derivative contracts designated as net investment hedges, certain of our foreign currency denominated debt instruments are designated as net investment hedges. The carrying value of those debt instruments designated as net investment hedges, which includes the adjustment for the foreign currency transaction gain or loss on those instruments, was $
12.4
billion and $
11.2
billion as of December 31, 2025 and June 30, 2025, respectively. The increase in the notional balance of interest rate contracts designated as fair value hedges is driven by debt portfolio rebalancing to meet interest rate risk management objectives.
Derivative assets
are presented in Prepaid expenses and other current assets or Other noncurrent assets.
Derivative liabilities
are presented in Accrued and other liabilities or Other noncurrent liabilities. Changes in the fair value of net investment hedges are recognized in the Foreign currency translation component of Other comprehensive income (OCI). All of the Company's derivative assets and liabilities measured at fair value are classified as Level 2 within the fair value hierarchy.
Certain of the Company's financial instruments used in hedging transactions are governed by industry standard netting and collateral agreements with counterparties. If the Company's credit rating were to fall below the levels stipulated in the agreements, the counterparties could demand either collateralization or termination of the arrangements. The aggregate fair value of the instruments covered by these contractual features that are in a liability position was $
706
and $
1.1
billion 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.
Amounts in millions of dollars except per share amounts or as otherwise specified.
12 The Procter & Gamble Company
Before tax gains and losses on our financial instruments in hedging relationships are categorized as follows:
Amount of Gain/(Loss) Recognized in OCI on Derivatives
Three Months Ended December 31 Six Months Ended December 31
2025 2024 2025 2024
DERIVATIVES IN NET INVESTMENT HEDGING RELATIONSHIPS (1) (2)
Foreign currency interest rate contracts $ ( 17 ) $ 857 $ ( 3 ) $ 356

(1)    
For the derivatives in net investment hedging relationships, the amount of gain excluded from effectiveness testing, which was recognized in earnings, was $
65
and $
57
for the three months ended December 31, 2025 and 2024, respectively. The amount of gain excluded from effectiveness testing was $
136
and $
107
for the six months ended December 31, 2025 and 2024, respectively.
(2)    
In addition to the foreign currency derivative contracts designated as net investment hedges, certain of our foreign currency denominated debt instruments are designated as net investment hedges. The amount of gain recognized in Accumulated other comprehensive income (AOCI) for such instruments was $
9
and $
825
for the three months ended December 31, 2025 and 2024, respectively. The amount of gain recognized in AOCI for such instruments was $
39
and $
215
for the six months ended December 31, 2025 and 2024, respectively.

Amount of Gain/(Loss) Recognized in Earnings
Three Months Ended December 31 Six Months Ended December 31
2025 2024 2025 2024
DERIVATIVES IN FAIR VALUE HEDGING RELATIONSHIPS
Interest rate contracts $ ( 12 ) $ 34 $ ( 5 ) $ 110
DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS
Foreign currency contracts $ 28 $ ( 174 ) $ 22 $ ( 48 )

The gains/(losses) on the derivatives in fair value hedging relationships are fully offset by the mark-to-market impact of the related exposure. These are both recognized in Interest expense. The gains/(losses) on derivatives not designated as hedging instruments are substantially offset by the currency mark-to-market of the related exposure. These are both recognized in Selling, general and administrative expense (SG&A).
8.
Accumulated Other Comprehensive Income/(Loss)
The table below presents the changes in Accumulated other comprehensive income/(loss) attributable to Procter & Gamble (AOCI), including the reclassifications out of AOCI by component:
Investment Securities Postretirement Benefit Plans Foreign Currency Translation Total AOCI
BALANCE AT JUNE 30, 2025, NET OF TAX $ 9 $ ( 777 ) $ ( 11,375 ) $ ( 12,143 )
Other comprehensive income/(loss), before tax:
OCI before reclassifications 1 ( 12 ) 33 23
Amounts reclassified to the Consolidated Statement of Earnings — 14 — 14
Total other comprehensive income/(loss), before tax 1 2 33 36
Tax effect ( 1 ) — ( 8 ) ( 9 )
Total other comprehensive income/(loss), net of tax 1 1 25 27
Less: OCI attributable to noncontrolling interests, net of tax — — ( 9 ) ( 8 )
BALANCE AT DECEMBER 31, 2025, NET OF TAX $ 10 $ ( 776 ) $ ( 11,342 ) $ ( 12,108 )

Foreign currency translation includes financial statement translation and changes in fair value of net investment hedges (see Note 7).
Postretirement benefit plan amounts are reclassified from AOCI into Other non-operating income/(expense), net and included in the computation of net periodic postretirement costs.
9.
Commitments and Contingencies
Litigation
We are subject, from time to time, to certain legal proceedings and claims arising out of our business, which cover a wide range of matters, including antitrust and trade regulation, product liability, advertising, contracts, environmental, patent and trademark matters, labor and employment matters and tax. While considerable uncertainty exists, in the opinion of management and our counsel, the ultimate resolution of the various lawsuits and claims will not materially affect our financial position, results of operations or cash flows.
Amounts in millions of dollars except per share amounts or as otherwise specified.
The Procter & Gamble Company 13
We are also subject to contingencies pursuant to environmental laws and regulations that in the future may require us to take action to correct the effects on the environment of prior manufacturing and waste disposal practices. Based on currently available information, we do not believe the ultimate resolution of environmental remediation will materially affect our financial position, results of operations or cash flows.
Income Tax Uncertainties
The Company is present in about
70
countries and over
150
taxable jurisdictions and, at any point in time, has
30
–
40
jurisdictional audits underway at various stages of completion. We evaluate our tax positions and establish liabilities for uncertain tax positions that may be challenged by local authorities and may not be fully sustained, despite our belief that the underlying tax positions are fully supportable. Uncertain tax positions are reviewed on an ongoing basis and are adjusted in light of changing facts and circumstances, including progress of tax audits, developments in case law and closing of statutes of limitations. Such adjustments are reflected in the tax provision as appropriate. We have tax years open ranging from 2010 and forward. We are generally not able to reliably estimate the timing and ultimate settlement amounts until the close of an audit. Based on information currently available, we anticipate over the next 12-month period, audit activity could be completed related to uncertain tax positions in multiple jurisdictions for which we have accrued liabilities of approximately $
124
, including interest and penalties.
Additional information on the Commitments and Contingencies of the Company can be found in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025.
10.
Supplier Finance Programs
The Company has an ongoing program to negotiate extended payment terms with its suppliers consistent with market practices. The Company also supports a Supply Chain Finance program (“SCF”) with several global financial institutions. Under SCF, the Company maintains an accounts payable system to facilitate participating suppliers' ability to sell receivables from the Company to a SCF bank. These participating suppliers negotiate their sales of receivables arrangements directly with the respective SCF bank. The Company is not party to those agreements, but the SCF banks allow the suppliers to utilize the Company’s creditworthiness in establishing credit spreads and associated costs. Under this model, this arrangement generally provides the suppliers with more favorable terms than they would be able to secure on their own. The Company has no economic interest in a supplier’s decision to sell a receivable. Once a qualifying supplier chooses to participate in SCF, the supplier selects which individual Company invoices to sell to the SCF bank. The Company’s obligations to its suppliers, including the amounts due and scheduled payment dates, are not impacted by the supplier’s decisions to finance amounts under these arrangements. The Company does not provide any form of guarantee under these financing arrangements. Our payment terms for suppliers under this program generally range from
60
to
180
days. All outstanding amounts related to suppliers participating in SCF are recorded within Accounts payable in our Consolidated Balance Sheets, and the associated payments are included in operating activities within our Consolidated Statements of Cash Flows. The amount due to suppliers participating in SCF and included in
Accounts payable
was approximately $
5.8
 billion as of December 31, 2025 and June 30, 2025.
11.
Restructuring Program
The Company has historically incurred an ongoing annual level of restructuring-type activities to maintain a competitive cost structure, including manufacturing and workforce optimization. Before tax costs incurred under the ongoing program have generally ranged from $
250
to $
500
annually. Consistent with our historical policies for restructuring-type activities, the restructuring program charges will be funded by and included within Corporate for management and segment reporting.
In June 2025, the Company announced a portfolio and productivity plan to streamline its portfolio and organization to improve its cost structure and competitiveness. The Company expects to incur approximately $
1.5
to $
2.0
billion in before-tax restructuring costs over
two years
. The Company expects to incur half of the costs under this plan by the end of fiscal 2026, with the remainder incurred in fiscal 2027.
The restructuring activities will be executed across the Sector Business Units as well as the Enterprise Markets, Corporate Functions and Global Business Services. These restructuring activities include a plan for a reduction of up to
7,000
non-manufacturing overhead personnel by the end of fiscal 2027. In addition, the plan includes brand and market exits as well as the optimization of the supply chain and other manufacturing processes.
Costs incurred under the plan will consist primarily of costs to separate employees and asset-related costs to exit facilities. The Company will also incur other types of costs outlined below as a direct result of the plan. For the three months ended December 31, 2025, the Company incurred total before tax charges of $
369
including $
180
in Costs of products sold, $
171
in SG&A and $
18
in Other non-operating income/(expense), net. For the six months ended December 31, 2025, the Company incurred charges of $
584
including $
280
in Costs of products sold, $
277
in SG&A and $
27
in Other non-operating income/(expense), net.
Amounts in millions of dollars except per share amounts or as otherwise specified.
14 The Procter & Gamble Company
The following table presents restructuring activity for the six months ended December 31, 2025:
Separations Asset Related Costs Other Total
RESERVE JUNE 30, 2025 $ 120 $ — $ 69 $ 189
Costs incurred for the three months ended September 30, 2025 124 27 65 215
Costs incurred for the three months ended December 31, 2025 198 83 88 369
Costs incurred for the six months ended December 31, 2025 322 109 152 584
Costs paid/settled for the six months ended December 31, 2025 ( 172 ) ( 109 ) ( 99 ) ( 380 )
RESERVE DECEMBER 31, 2025 $ 271 $ — $ 122 $ 393

Separation Costs
Employee separation costs relate to severance packages that are primarily voluntary and the amounts calculated are based on salary levels and past service periods.
Asset-Related Costs
Asset-related costs consist of both asset write-downs and accelerated depreciation for manufacturing consolidations. Asset write-downs relate to the establishment of a new fair value basis for assets held-for-sale or for disposal. These assets are written down to the lower of their current carrying basis or amounts expected to be realized upon disposal, less minor disposal costs. Charges for accelerated depreciation relate to long-lived assets that will be taken out of service prior to the end of their normal service period.
Other Costs

Other restructuring-type charges are incurred as a direct result of the restructuring plan. Such charges include asset removal and termination of contracts related to supply chain redesign.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements
Certain statements in this report, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may appear throughout this report, including without limitation, in the following sections: “Management's Discussion and Analysis,” “Risk Factors” and "Notes 4 and 9 to the Consolidated Financial Statements." These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result” and similar expressions. Forward-looking statements are based on current expectations and assumptions, which are subject to risks and uncertainties that may cause results to differ materially from those expressed or implied in the forward-looking statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events or otherwise, except to the extent required by law.
Risks and uncertainties to which our forward-looking statements are subject include, without limitation: (1) the ability to successfully manage global financial risks, including foreign currency fluctuations, changes in global interest rates and rate differentials, currency exchange, or pricing controls and tariffs; (2) the ability to successfully manage local, regional or global economic volatility, including reduced market growth rates, and to generate sufficient income and cash flow to allow the Company to effect the expected share repurchases and dividend payments; (3) the ability to successfully manage uncertainties related to changing political and geopolitical conditions and potential implications such as exchange rate fluctuations, market contraction, boycotts, variability and unpredictability in trade relations, sanctions, tariffs or other trade controls; (4) the ability to manage disruptions in credit markets or to our banking partners or changes to our credit rating; (5) the ability to maintain key manufacturing and supply arrangements (including execution of supply chain optimizations and sole supplier and sole manufacturing plant arrangements) and to manage disruption of business due to various factors, including ones outside of our control, such as natural disasters, acts of war or terrorism or disease outbreaks; (6) the ability to successfully manage cost fluctuations and pressures, including prices of commodities and raw materials and costs of labor, transportation, energy, pensions and healthcare; (7) the ability to compete with our local and global competitors in new and existing sales channels, including by successfully responding to competitive factors such as prices, promotional incentives and trade terms for products; (8) the ability to manage and maintain key customer relationships; (9) the ability to protect our reputation and brand equity by successfully managing real or perceived issues, including concerns about safety, quality, ingredients, efficacy, packaging content, supply chain practices, social or environmental practices or similar matters that may arise; (10) the ability to successfully manage the financial, legal, reputational and operational risk associated with third-party relationships, such as our suppliers, contract manufacturers, distributors, contractors and external business partners; (11) the ability to rely on and
Amounts in millions of dollars except per share amounts or as otherwise specified.
The Procter & Gamble Company 15
maintain key company and third-party information and operational technology systems, networks and services and maintain the security and functionality of such systems, networks and services and the data contained therein; (12) the ability to successfully manage the demand, supply and operational challenges, as well as governmental responses or mandates, associated with a disease outbreak, including epidemics, pandemics or similar widespread public health concerns; (13) the ability to stay on the leading edge of innovation, obtain necessary intellectual property protections and successfully respond to changing consumer habits, evolving digital marketing and selling platform requirements and technological advances attained by, and patents granted to, competitors; (14) the ability to successfully manage our ongoing acquisition, divestiture and joint venture activities, in each case to achieve the Company’s overall business strategy and financial objectives, without impacting the delivery of base business objectives; (15) the ability to successfully achieve productivity improvements and cost savings and manage ongoing organizational changes while successfully identifying, developing and retaining key employees, including in key growth markets where the availability of skilled or experienced employees may be limited; (16) the ability to successfully manage current and expanding regulatory and legal requirements and matters (including, without limitation, those laws, regulations, policies and related interpretations involving product liability, product and packaging composition, manufacturing processes, intellectual property, labor and employment, antitrust, privacy, cybersecurity, data protection and data transfers, artificial intelligence, tax, the environment, due diligence, risk oversight, accounting and financial reporting) and to resolve new and pending matters within current estimates; (17) the ability to manage changes in applicable tax laws and regulations; and (18) the ability to continue delivering progress towards our environmental sustainability ambitions. A detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from those projected herein is included in the section titled "Economic Conditions and Uncertainties" and the section titled "Risk Factors" (Part II, Item 1A) of this Form 10-Q.
Purpose, Approach and Non-GAAP Measures
The purpose of Management's Discussion and Analysis (MD&A) is to provide an understanding of Procter & Gamble's financial condition, results of operations and cash flows by focusing on changes in certain key measures from year to year. The MD&A is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and accompanying Notes.
The MD&A is organized in the following sections:
•
Overview
•
Recent Developments
•
Summary of Results – Six Months Ended December 31, 2025
•
Economic Conditions and Uncertainties
•
Results of Operations – Three and Six Months Ended December 31, 2025
•
Segment Results – Three and Six Months Ended December 31, 2025
•
Liquidity and Capital Resources
•
Measures Not Defined by U.S. GAAP
Throughout the MD&A we refer to measures used by management to evaluate performance, including unit volume growth, net sales, net earnings, diluted net earnings per common share (diluted EPS) and operating cash flow. We also refer to a number of financial measures that are not defined under U.S. GAAP, consisting of organic sales growth, Core earnings per share (Core EPS), adjusted free cash flow and adjusted free cash flow productivity. The explanation at the end of the MD&A provides the definition of these non-GAAP measures, details on the use and the derivation of these measures, as well as reconciliations to the most directly comparable U.S. GAAP measure.
Management also uses certain market share and market consumption estimates to evaluate performance relative to competition despite some limitations on the availability and comparability of share and consumption information. References to market share and consumption in the MD&A are based on a combination of vendor-purchased traditional brick-and-mortar and online data in key markets as well as internal estimates. All market share references represent the percentage of sales of our products in dollar terms on a constant currency basis relative to all product sales in the category. The Company measures quarter and fiscal year to date market share through the most recent period for which market share data is available, which typically reflects a lag time of one or two months as compared to the end of the reporting period. Management also uses unit volume growth to evaluate drivers of changes in net sales. Organic volume growth reflects year-over-year changes in unit volume excluding the impacts of acquisitions and divestitures and certain one-time items, if applicable, and is used to explain changes in organic sales. In the presentation of data in tables or other charts, certain columns and rows may not add due to rounding.
OVERVIEW
P&G is a global leader in the fast-moving consumer goods industry, focused on providing branded consumer packaged goods of superior quality and value to our consumers around the world. Our products are sold in about 180 countries and territories, primarily through mass merchandisers, e-commerce (including social commerce) channels, grocery stores, membership club stores, drug stores, department stores, distributors, wholesalers, specialty beauty stores (including airport duty-free stores), high-frequency stores, pharmacies, electronics stores and professional channels. We also sell direct to individual consumers. We have on-the-ground operations in about 70 countries.

16 The Procter & Gamble Company
Our market environment is highly competitive with global, regional and local competitors. In many of the markets and industry segments in which we sell our products, we compete against other branded products as well as retailers' private-label brands. Additionally, many of the product segments in which we compete are differentiated by price tiers (referred to as super-premium, premium, mid-tier and value-tier products). We believe we are well positioned in the industry segments and markets in which we operate, often holding a leadership or significant market share position.
The table below lists our reportable segments, including the product categories and brand composition within each segment.
Reportable Segments Product Categories (Sub-Categories) Major Brands
Beauty Hair Care ( Conditioners, Shampoos, Styling Aids, Treatments ) Head & Shoulders, Herbal Essences, Pantene, Rejoice
Personal Care (1) ( Antiperspirants and Deodorants, Personal Cleansing ) Native, Old Spice, Safeguard, Secret
Skin Care (1) (Facial Moisturizers, Cleaners and Treatments) Olay, SK-II
Grooming Grooming ( Appliances, Female Blades & Razors, Male Blades & Razors, Pre- and Post-Shave Products, Other Grooming ) Braun, Gillette, Venus
Health Care Oral Care ( Toothbrushes, Toothpastes, Other Oral Care ) Crest, Oral-B
Personal Health Care ( Gastrointestinal, Pain Relief, Rapid Diagnostics, Respiratory, Vitamins/Minerals/Supplements, Other Personal Health Care ) Metamucil, Neurobion, Pepto-Bismol, Vicks
Fabric & Home Care Fabric Care ( Fabric Enhancers, Laundry Additives, Laundry Detergents ) Ariel, Downy, Gain, Tide
Home Care ( Air Care, Dish Care, P&G Professional, Surface Care ) Cascade, Dawn, Fairy, Febreze, Mr. Clean, Swiffer
Baby, Feminine & Family Care Baby Care ( Baby Wipes, Taped Diapers and Pants ) Luvs, Pampers
Feminine Care ( Adult Incontinence, Menstrual Care ) Always, Always Discreet, Tampax
Family Care ( Paper Towels, Tissues, Toilet Paper ) Bounty, Charmin, Puffs

(1)    
Effective July 1, 2024, the Beauty reportable business segment separated Skin and Personal Care into individual operating segments, Skin Care and Personal Care. This transition included separation of the management team, strategic decision-making, innovation plans, financial targets, budgets and management reporting.
Throughout the MD&A, we reference business results by region, which are comprised of North America, Europe, Greater China, Latin America, Asia Pacific and India, Middle East and Africa (IMEA).
The following table provides the percentage of net sales and net earnings by reportable business segment (excluding Corporate) for the three and six months ended December 31, 2025:
Three Months Ended December 31, 2025 Six Months Ended December 31, 2025
Net Sales Net Earnings Net Sales Net Earnings
Beauty 18 % 17 % 19 % 18 %
Grooming 8 % 9 % 8 % 9 %
Health Care 16 % 17 % 15 % 16 %
Fabric & Home Care 35 % 34 % 35 % 34 %
Baby, Feminine & Family Care 23 % 23 % 23 % 23 %
Total Company 100 % 100 % 100 % 100 %

RECENT DEVELOPMENTS
Limited Market Portfolio Restructuring
In the fiscal year ended June 30, 2024, the Company started a limited market portfolio restructuring of its business operations, primarily in certain Enterprise Markets, including Argentina and Nigeria, to address challenging macroeconomic and fiscal conditions. During the period ended September 30, 2024, the Company completed this limited market portfolio restructuring with the substantial liquidation of its operations in Argentina and recorded incremental restructuring charges of approximately $0.8 billion after tax, comprised primarily of non-cash charges for accumulated foreign currency translation losses previously included in Accumulated other comprehensive income/(loss). The total incremental restructuring charges incurred under the program beginning in the three-month period ended December 31, 2023, through the three-month period ended September 30, 2024, were approximately $1.2 billion after tax.
The Procter & Gamble Company 17
Focused Portfolio, Supply Chain and Productivity Plan
In June 2025, the Company announced a portfolio and productivity plan to streamline its portfolio and organization to improve its cost structure and competitiveness. The Company expects to incur approximately $1.5 to $2.0 billion in before-tax restructuring costs over a two-year period. The Company expects to incur half of the costs under this plan by the end of fiscal 2026, with the remainder incurred in fiscal 2027. The restructuring activities will be executed across the Sector Business Units as well as the Enterprise Markets, Corporate Functions and Global Business Services. These restructuring activities include a plan for a reduction of up to 7,000 non-manufacturing overhead personnel by the end of fiscal 2027.
Consistent with our historical policies for ongoing restructuring-type activities, resulting charges were funded by and included within Corporate for segment reporting. Restructuring charges above the normal ongoing level of restructuring costs are reported as non-core charges. For more details on the restructuring program, refer to Note 11 to the Consolidated Financial Statements.
Glad Joint Venture Agreement
The Company and The Clorox Company (Clorox) have jointly decided not to renew the Glad joint venture agreement. Under the terms of the agreement, Clorox will purchase the Company’s minority interest in the venture at fair market value as of the agreement termination in January 2026. Subject to market conditions and the parties' negotiations with respect to fair market value, the Company expects to receive cash proceeds of approximately $500 million and record an after-tax gain in the range of $250 to $300 million in the third quarter of the fiscal year ended June 30, 2026.
SUMMARY OF RESULTS – Six Months Ended December 31, 2025
The following are highlights of results for the six months ended December 31, 2025, versus the six months ended December 31, 2024:
•
Net sales were $44.6 billion, an increase of $975 million, or 2%, versus the prior year period. Net sales increased mid-single digits in Beauty, Grooming and Health Care, and low single digits in Fabric & Home Care. Net sales decreased low single digits in Baby, Feminine & Family Care. Organic sales, which exclude the impacts of acquisitions and divestitures and foreign exchange, increased 1% versus the prior year period. Organic sales increased mid-single digits in Beauty and low single digits in Grooming and Health Care and were unchanged in Fabric & Home Care. Organic sales decreased low single digits in Baby, Feminine & Family Care.
•
Net earnings were $9.1 billion, an increase of $466 million, or 5%, versus the prior year period due primarily to 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 $9.1 billion, an increase of $481 million, or 6%, versus the prior year period.
•
Diluted EPS increased 7% to $3.73 due to the increase in net earnings. Core EPS, which excludes incremental restructuring charges, increased 2% to $3.87.
•
Operating cash flow was $10.4 billion. Adjusted free cash flow, which is defined as operating cash flow less capital expenditures and excluding payments for the transitional tax resulting from the 2017 U.S. Tax Act, was $8.7 billion. Adjusted free cash flow productivity, which is defined as adjusted free cash flow as a percentage of net earnings, was 95%.
ECONOMIC CONDITIONS AND UNCERTAINTI
ES
Global Economic Conditions.
Our products are sold in numerous countries worldwide, with more than half our sales generated outside the United States. Our largest international markets are Greater China, the United Kingdom, Canada, Japan and Germany and collectively comprised approximately 21% of our net sales in fiscal 2025. As a result, we are exposed to global macroeconomic factors, geopolitical tensions and government policies. We are exposed to various risks due to economic, political and social instabilities, market volatility, natural disasters, debt and credit issues, currency controls, new or increased tariffs, foreign exchange and interest rate changes. These risks can negatively impact our net sales, net earnings and cash flows. For example, we are exposed to risks due to the ongoing war between Russia and Ukraine. Our Russia business accounted for 1% of consolidated net sales, net earnings and net assets as of June 30, 2025.
Foreign Exchange.
We have significant exposure to exchange rate fluctuations, both due to translation and transaction exposures. Translation exposures arise from measuring income statements of foreign subsidiaries with functional currencies other than the U.S. dollar. Transaction exposures involve impacts from 1) input costs that are denominated in currencies other than the local reporting currency and 2) revaluation of working capital balances denominated in currencies other than the functional currency. We have experienced significant foreign exchange impacts in the past due to the weakening of certain foreign currencies versus the U.S. dollar, which have negatively impacted net sales, net earnings and cash flows. In response to the devaluation of foreign currencies (including those deemed highly inflationary), any lags or inability (due to government restrictions) to implement price increases or the negative impacts of such actions on product consumption may lead to a decline in our net sales, net earnings and cash flows.
18 The Procter & Gamble Company
Commodities and Supply Chain.
Our costs are subject to fluctuations due to changes in commodity and input material prices, transportation costs, inflationary impacts and productivity efforts. We have significant exposures to certain commodities and input materials, in particular certain oil-derived materials like resins and paper-based materials like pulp. Volatility in the market price of commodities and input materials directly affects our costs. Disruptions in manufacturing, supply and distribution operations can lead to increased costs. Legal or regulatory requirements and sustainability initiatives may result in increased costs. We strive to implement, achieve and sustain cost improvement plans, including supply chain optimization and general overhead and workforce optimization. Increased pricing in response to certain inflationary or cost increases may also offset portions of the cost impacts; however, such price increases may negatively impact product consumption. If we are unable to manage cost impacts through pricing actions and consistent productivity improvements, it may negatively impact our net sales, net earnings and cash flows.
Government Policies.
We are exposed to changes in U.S. and foreign government legislative, regulatory or enforcement policies that can have a negative impact on net sales, net earnings and cash flows. These include tax policy changes (both U.S. and foreign), including those resulting from the current work being led by the OECD/G20 Inclusive Framework focused on "Addressing the Challenges of the Digitalization of the Economy”. Government controls such as currency exchanges, pricing and import authorizations as well as government policies related to environmental and climate change matters and changes to international trade agreements, including tariffs, can also impact our financial performance.
For additional information on risk factors that could impact our business results, please refer to Risk Factors in Part I, Item 1A of the Company's Form 10-K for the fiscal year ended June 30, 2025.
RESULTS OF OPERATIONS – Three Months Ended December 31, 2025
The following discussion provides a review of results for the three months ended December 31, 2025, versus the three months ended December 31, 2024.
Three Months Ended December 31
Amounts in millions, except per share amounts 2025 2024 % Chg
Net sales $ 22,208 $ 21,882 1%
Operating income 5,366 5,741 (7)%
Earnings before income taxes 5,421 5,845 (7)%
Net earnings 4,331 4,659 (7)%
Net earnings attributable to Procter & Gamble 4,319 4,630 (7)%
Diluted net earnings per common share 1.78 1.88 (5)%
Core net earnings per common share 1.88 1.88 —%
Three Months Ended December 31
COMPARISONS AS A PERCENTAGE OF NET SALES 2025 2024 Basis Pt Chg
Gross margin 51.2 % 52.4 % (120)
Selling, general & administrative expense 27.1 % 26.2 % 90
Operating income 24.2 % 26.2 % (200)
Earnings before income taxes 24.4 % 26.7 % (230)
Net earnings 19.5 % 21.3 % (180)
Net earnings attributable to Procter & Gamble 19.4 % 21.2 % (180)

Net Sales
Net sales for the quarter increased 1% to $22.2 billion. The increase in net sales was due to favorable foreign exchange of 1% and higher pricing of 1%, partially offset by a decline in unit volume of 1%. Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales were unchanged.
The Procter & Gamble Company 19
The following table summarizes key drivers of the change in net sales by reportable segment:
Net Sales Change Drivers 2025 vs. 2024 (Three Months Ended December 31) (1)
Volume with Acquisitions & Divestitures Volume Excluding Acquisitions & Divestitures Foreign Exchange Price Mix Other (2) Net Sales Growth
Beauty 3 % 3 % 1 % 2 % (1) % — % 5 %
Grooming (2) % (2) % 2 % 2 % — % — % 2 %
Health Care (1) % (1) % 2 % 1 % 2 % 1 % 5 %
Fabric & Home Care — % — % 1 % 1 % (1) % — % 1 %
Baby, Feminine & Family Care (5) % (5) % 1 % — % — % 1 % (3) %
Total Company (1) % (1) % 1 % 1 % — % — % 1 %

(1)
Net sales percentage changes are approximations based on quantitative formulas that are consistently applied.    
(2)
Other includes the sales mix impact from acquisitions and divestitures and rounding impacts necessary to reconcile volume to net sales.
Operating Costs
Gross margin decreased 120 basis points to 51.2% of net sales for the quarter. The decrease in gross margin was due to:
•
120 basis points of decline from 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,
•
20 basis points of unfavorable foreign exchange impacts and
•
10 basis points of other items and rounding.
These impacts were partially offset by:
•
170 basis points of manufacturing productivity savings and
•
50 basis points of increase due to higher pricing.
Total SG&A spending increased 5% to $6.0 billion versus the prior year period due to increased marketing spending and overhead costs. SG&A as a percentage of net sales increased 90 basis points to 27.1% due primarily to an increase in marketing spending as a percentage of net sales and an increase in overhead costs as a percentage of net sales, partially offset by a decrease in other operating expenses as a percentage of net sales. Marketing spending as a percentage of net sales increased 80 basis points due to an increase in marketing spending, partially offset by productivity savings. Overhead costs as a percentage of net sales were increased 40 basis points as wage inflation and restructuring spending were partially offset by productivity savings. Other operating expenses as a percentage of net sales decreased 40 basis points primarily driven by favorable foreign exchange impacts. Productivity-driven cost savings delivered 110 basis points of benefit to SG&A as a percentage of net sales.
Operating income decreased $375 million, or 7%, to $5.4 billion and operating margin decreased 200 basis points to 24.2% versus the prior year period due to the decrease in gross margin and an increase in SG&A as a percentage of net sales, the components of which are described above.
Non-Operating Expenses and Income
Interest expense was $220 million for the quarter, a decrease of $20 million versus the prior year period. Interest income was $115 million for the quarter, a decrease of $4 million versus the prior year period. Other non-operating income/(expense) was $160 million, which is a decrease of $64 million versus the prior year period.
Income Taxes
The effective income tax rate for the three months ended December 31, 2025, was 20.1%, compared to 20.3% for the three months ended December 31, 2024. The decrease in the effective tax rate was primarily driven by discrete impacts related to uncertain tax positions, partially offset by an increase due to lower excess tax benefits of share-based compensation in the current year.
Net Earnings
Net earnings were $4.3 billion, a decrease of $328 million, or 7%, versus the prior year period due primarily to the decrease in operating income, the details of which are described above. Foreign exchange had a positive impact of approximately $89 million 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 Procter & Gamble were $4.3 billion, a decrease of $311 million, or 7%, for the quarter. Diluted EPS decreased 5% to $1.78 versus the prior year period.
20 The Procter & Gamble Company
RESULTS OF OPERATIONS – Six Months Ended December 31, 2025
The following discussion provides a review of results for the six months ended December 31, 2025, versus the six months ended December 31, 2024.
Six Months Ended December 31
Amounts in millions, except per share amounts 2025 2024 % Chg
Net sales $ 44,594 $ 43,619 2%
Operating income 11,222 11,538 (3)%
Earnings before income taxes 11,455 10,985 4%
Net earnings 9,112 8,646 5%
Net earnings attributable to Procter & Gamble 9,070 8,589 6%
Diluted net earnings per common share 3.73 3.49 7%
Core net earnings per common share 3.87 3.81 2%
Six Months Ended December 31
COMPARISONS AS A PERCENTAGE OF NET SALES 2025 2024 Basis Pt Chg
Gross margin 51.3 % 52.2 % (90)
Selling, general & administrative expense 26.1 % 25.8 % 30
Operating income 25.2 % 26.5 % (130)
Earnings before income taxes 25.7 % 25.2 % 50
Net earnings 20.4 % 19.8 % 60
Net earnings attributable to Procter & Gamble 20.3 % 19.7 % 60

Net Sales
Net sales for the period increased 2% to $44.6 billion driven by a 1% increase from higher pricing and a 1% increase from favorable foreign exchange. Volume and mix was unchanged. Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales increased 1%.
The following table summarizes key drivers of the change in net sales by reportable segment:
Net Sales Change Drivers 2025 vs. 2024 (Six Months Ended December 31) (1)
Volume with Acquisitions & Divestitures Volume Excluding Acquisitions & Divestitures Foreign Exchange Price Mix Other (2) Net Sales Growth
Beauty 4 % 4 % 1 % 2 % (1) % — % 6 %
Grooming — % — % 2 % 3 % (1) % — % 4 %
Health Care (1) % (1) % 2 % 1 % 2 % — % 4 %
Fabric & Home Care (1) % (1) % 1 % 1 % — % — % 1 %
Baby, Feminine & Family Care (3) % (3) % 1 % — % 1 % — % (1) %
Total Company — % — % 1 % 1 % — % — % 2 %

(1)
Net sales percentage changes are approximations based on quantitative formulas that are consistently applied.    
(2)
Other includes the sales mix impact from acquisitions and divestitures and rounding impacts necessary to reconcile volume to net sales.
Operating Costs
Gross margin decreased 90 basis points to 51.3% of net sales for the period. The decrease in gross margin was due to:
•
90 basis points of decline from unfavorable product mix,
•
60 basis points of product and packaging investments,
•
60 basis points of higher tariff costs,
•
60 basis points of unfavorable foreign exchange impacts and
•
50 basis points of higher restructuring costs.
These impacts were partially offset by:
•
170 basis points of manufacturing productivity savings,
•
50 basis points of increase due to higher pricing and
The Procter & Gamble Company 21
•
10 basis points of other items and rounding.
Total SG&A spending increased 4% to $11.7 billion versus the prior year period due to increased marketing spending and overhead costs. SG&A as a percentage of net sales increased 30 basis points to 26.1% due primarily to a 30 basis point increase in marketing spending as a percentage of sales as the increase in marketing spending was partially offset by productivity savings. Overhead costs as a percentage of net sales increased 20 basis points as wage inflation and restructuring spending were partially offset by productivity savings. Other operating expenses as a percentage of net sales decreased 10 basis points primarily driven by favorable foreign exchange impacts. Productivity-driven cost savings delivered 100 basis points of benefit to SG&A as a percentage of net sales.
Operating income decreased $316 million, or 3%, to $11.2 billion and operating margin decreased 130 basis points to 25.2% versus the prior year period due primarily to incremental restructuring charges in the current year.
Non-Operating Expenses and Income
Interest expense was $417 million for the period, a decrease of $61 million versus the prior year period. Interest income was $222 million for the period, a decrease of $32 million versus the prior year period. Other non-operating income/(expense) was $427 million, which is an increase of $757 million versus the prior year period primarily due to the non-cash charge for accumulated foreign currency translation losses due to the substantial liquidation of operations in Argentina recorded in the prior year period.
Income Taxes
The effective income tax rate for the six months ended December 31, 2025, was 20.5%, compared to 21.3% for the six months ended December 31, 2024.
The decrease in the effective tax rate was primarily driven by the prior year charge for accumulated foreign currency translation losses due to the substantial liquidation of operations in Argentina of 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
Net earnings increased $466 million, or 5%, to $9.1 billion, as the increase in other non-operating income/(expense), the components of which are described above, were partially offset by the decrease in operating income. Foreign exchange had a positive impact of approximately $85 million on net earnings for the period, including both transactional and translational impacts from converting earnings from foreign subsidiaries to U.S. dollars. Net earnings attributable to Procter & Gamble increased $481 million, or 6%, to $9.1 billion for the period. Diluted EPS increased 7% to $3.73 versus the prior year period due to the increase in net earnings. Core EPS, which represents diluted EPS excluding charges for incremental restructuring, increased 2% to $3.87.
SEGMENT RESULTS – Three and Six Months Ended December 31, 2025
The following discussion provides a review of results by reportable business segment. Analysis of the results for the three and six months ended December 31, 2025, is provided based on a comparison to the three and six months ended December 31, 2024. The primary financial measures used to evaluate segment performance are net sales and net earnings. The table below provides supplemental information on net sales, earnings before income taxes and net earnings by reportable business segment for the three and six months ended December 31, 2025, versus the comparable prior year period (dollar amounts in millions):
Three Months Ended December 31, 2025
Net Sales % Change Versus Year Ago Earnings/(Loss) Before Income Taxes % Change Versus Year Ago Net Earnings/(Loss) % Change Versus Year Ago
Beauty $ 4,039 5 % $ 992 — % $ 763 (2) %
Grooming 1,794 2 % 531 (7) % 417 (9) %
Health Care 3,406 5 % 1,009 4 % 770 2 %
Fabric & Home Care 7,686 1 % 1,961 (1) % 1,521 (3) %
Baby, Feminine & Family Care 5,123 (3) % 1,338 (9) % 1,020 (9) %
Corporate 160 N/A (412) N/A (161) N/A
Total Company $ 22,208 1 % $ 5,421 (7) % $ 4,331 (7) %

22 The Procter & Gamble Company
Six Months Ended December 31, 2025
Net Sales % Change Versus Year Ago Earnings/(Loss) Before Income Taxes % Change Versus Year Ago Net Earnings/(Loss) % Change Versus Year Ago
Beauty $ 8,182 6 % $ 2,124 3 % $ 1,643 1 %
Grooming 3,611 4 % 1,117 2 % 881 — %
Health Care 6,626 4 % 1,947 1 % 1,489 (1) %
Fabric & Home Care 15,479 1 % 4,003 (2) % 3,100 (3) %
Baby, Feminine & Family Care 10,294 (1) % 2,784 (2) % 2,125 (3) %
Corporate 402 N/A (520) N/A (125) N/A
Total Company $ 44,594 2 % $ 11,455 4 % $ 9,112 5 %

Beauty
Three months ended December 31, 2025, compared with three

months ended December 31, 2024
Beauty net sales increased 5% to $4.0 billion as a 3% increase in unit volume, the positive impacts of pricing of 2% and favorable foreign exchange of 1% were partially offset by unfavorable geographic mix of 1%. Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales increased 4%. Global market share of the Beauty segment decreased 0.3 points.
•
Hair Care net sales increased mid-single digits. Positive impacts of an increase in unit volume, higher pricing (primarily in Latin America and Europe) and favorable foreign exchange were partially offset by unfavorable geographic mix. The volume increase was driven by growth in Latin America and Asia Pacific (both due to innovation), partially offset by a decline in North America (due to competitive activity). Organic sales also increased mid-single digits due to mid-teens growth in Latin America, high single-digit growth in Asia Pacific and mid-single-digit growth in Europe, partially offset by a mid-single-digit decline in North America. Global market share of the Hair Care category decreased 0.7 points.
•
Personal Care net sales increased mid-single digits. Positive impacts from an increase in unit volume, innovation-driven pricing (primarily in North America) and favorable foreign exchange were partially offset by negative impacts from unfavorable geographic mix. The volume increase was across all regions, led by growth in Europe, Greater China and North America (all due to innovation). Organic sales also increased mid-single digits led by high-teens growth in Europe, mid-single-digit growth in Greater China and low single-digit growth in North America. Global market share of the Personal Care category increased 0.4 points.
•
Skin Care net sales increased low single digits. Positive impacts from favorable product mix (due primarily to the increase of the super-premium SK-II brand, which has higher than category-average selling prices) and higher pricing (primarily in Greater China) were partially offset by a decrease in unit volume. The volume decrease was driven by Greater China (due to competitive activity). Organic sales also increased low single digits due to a mid-single-digit growth in Greater China, partially offset by a high single-digit decline in North America. Global market share of the Skin Care category decreased 0.7 points.
Net earnings decreased 2% to $763 million as the increase in net sales was more than offset by a 140 basis-point decline in net earnings margin. Net earnings margin decreased due to a decrease in gross margin and an increase in SG&A as a percentage of net sales. The gross margin decline of 50 basis points was driven by higher cost of tariffs, higher commodity costs and unfavorable geographic mix, partially offset by productivity savings. SG&A as a percentage of net sales increased due to an increase in marketing spending, partially offset by a decrease in overhead spending.
Six months ended December 31, 2025, compared with six months ended December 31, 2024
Beauty net sales increased 6% to $8.2 billion, driven by a 4% increase in unit volume, the positive impacts of higher pricing of 2% and favorable foreign exchange of 1%, partially offset by unfavorable geographic mix of 1%. Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales increased 5%. Global market share of the Beauty segment decreased 0.4 points.
•
Hair Care net sales increased mid-single digits. Positive impacts of a unit volume increase, higher pricing (primarily in North America and Europe) and favorable foreign exchange were partially offset by unfavorable geographic mix. The increase in unit volume was driven by growth in Latin America and Europe (both due to innovation), partially offset by a decline in North America (due to competitive activity). Organic sales also increased mid-single digits due to low-teens growth in Latin America, high single-digit growth in Europe and mid-single-digit growth in Asia Pacific, partially offset by a low single-digit decline in North America. Global market share of the Hair Care category decreased 0.8 points.
•
Personal Care net sales increased high single digits. Positive impacts of an increase in unit volume, higher pricing (primarily in North America) and favorable foreign exchange were partially offset by unfavorable geographic mix. The volume increase was across all regions, led by growth in Greater China, North America and Europe (all due to innovation). Organic sales also increased high single digits led by mid-teens growth in Europe, high single-digit growth in Greater
The Procter & Gamble Company 23
China and mid-single-digit growth in North America. Global market share of the Personal Care category increased 0.3 points.
•
Skin Care net sales increased low single digits. Positive impacts of favorable product mix (due primarily to the increase of the super-premium SK-II brand, which has higher than category-average selling prices) and higher pricing (primarily in Greater China) were partially offset by a unit volume decrease. The volume decrease was driven by Europe (due to distribution loss) and Greater China (due to competitive activity). Organic sales also increased low single digits due to a high single-digit growth in Greater China and a mid-single-digit growth in Asia Pacific, partially offset by a low single-digit decline in North America. Global market share of the Skin Care category decreased 0.7 points.
Net earnings increased 1% to $1.6 billion due to an increase in net sales, partially offset by a 80 basis-point decline in net earnings margin. Net earnings margin decreased due to a decrease in gross margin. The gross margin decline of 70 basis-points was driven by higher cost of tariffs, unfavorable category mix and higher commodities, partially offset by increased productivity savings. SG&A as a percentage of net sales was unchanged as the increase in marketing spending was offset by a decrease in overhead spending.
Grooming
Three months ended December 31, 2025, compared with three

months ended December 31, 2024
Grooming net sales increased 2% to $1.8 billion as innovation-driven pricing of 2% (primarily by North America and Europe) and favorable foreign exchange of 2% were partially offset by a unit volume decrease of 2%. The volume decrease was driven by North America (due to market contraction) and Asia Pacific (due to competitive activity). Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales were unchanged as a 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 of the Grooming segment decreased 0.4 points.
Net earnings decreased 9% to $417 million due to a 290 basis-point decrease in net earnings margin, partially offset by an increase in net sales. Net earnings margin decreased due to a decrease in gross margin and an increase in SG&A as a percentage of net sales. The gross margin decrease of 190 basis points was primarily driven by unfavorable product mix and higher cost of tariffs, partially offset by increased productivity savings and higher pricing. SG&A as a percentage of net sales increased due to an increase in marketing spending, partially offset by a decrease in overhead spending.
Six months ended December 31, 2025, compared with six months ended December 31, 2024
Grooming net sales increased 4% to $3.6 billion as the benefits of higher pricing of 3% (driven by North America and Europe) and favorable foreign exchange of 2% were partially offset by unfavorable impacts of geographic mix of 1%. Unit volume was unchanged as growth in Latin America (due to increased distribution) was offset by a decline in North America (due to market contraction) and IMEA (due to competitive activity). Excluding the impact of acquisitions and divestitures and foreign exchange, Grooming organic sales increased 2% due to mid-single-digit growth in Europe and Latin America, partially offset by a low single-digit decline in North America. Global market share of the Grooming segment decreased 0.6 points.
Net earnings were unchanged at $881 million due to an increase in net sales offset by a 110 basis-point decrease in net earnings margin. Net earnings margin decreased due to a decrease in gross margin and an increase in the effective tax rate, partially offset by a decrease in SG&A as a percentage of net sales. The gross margin decline of 90 basis points was driven by unfavorable product mix and higher tariffs costs, partially offset by higher pricing and productivity savings. SG&A as a percentage of net sales decreased due to a decrease in overhead spending, partially offset by an increase in marketing spending. The higher effective tax rate was driven by unfavorable geographic mix.
Health Care
Three months ended December 31, 2025, compared with three

months ended December 31, 2024
Health Care net sales increased 5% to $3.4 billion as the benefits of favorable product mix of 2%, favorable foreign exchange impacts of 2% and higher pricing of 1% were partially offset by a 1% decrease in unit volume. Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales increased 3%. Global market share of the Health Care segment increased 0.3 points.
•
Oral Care net sales increased mid-single digits driven by positive impacts of favorable product mix (due to growth of power brushes and premium paste, which have higher than category-average selling prices) and favorable foreign exchange, partially offset by lower pricing (due to investments in North America and Europe) and a unit volume decline. The unit volume decrease was driven by declines in Greater China (due to market contraction and competitive activity), partially offset by increases in Europe (due to innovation) and Latin America (due to distribution gains). Organic sales increased low single digits driven by a high single-digit increase in Europe and a low single-digit increase in North America, partially 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 positive impacts of higher pricing (driven by North America) and favorable foreign exchange, partially offset by unfavorable product mix (due to the decline of respiratory
24 The Procter & Gamble Company
products, which have higher than category-average selling prices). Unit volume was unchanged as an increase in IMEA and Europe (both due to innovation) was offset by a decrease in North America (due to lower average incidence of cough and cold). Organic sales increased low single digits driven by a high single-digit increase in Latin America, a mid-single-digit increase in Europe and a low single-digit increase in North America. Global market share of the Personal Health Care category increased 0.4 points.
Net earnings increased 2% to $770 million due to an increase in net sales, partially offset by a 70 basis-point decrease in net earnings margin. Net earnings margin decreased due to a decrease in gross margin and a higher effective tax rate, partially offset by a decrease in SG&A as a percentage of net sales. The gross margin decrease of 80 basis points was driven primarily by unfavorable geographic mix and higher cost of tariffs, partially offset by productivity savings. SG&A as a percentage of net sales decreased due to a decrease in overhead spending, partially offset by an increase in marketing spending. The higher effective tax rate was driven by unfavorable geographic mix.
Six months ended December 31, 2025, compared with six months ended December 31, 2024
Health Care net sales increased 4% to $6.6 billion 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 the impact of acquisitions and divestitures and foreign exchange, organic sales increased 2%. Global market share of the Health Care segment increased 0.3 points.
•
Oral Care net sales increased low single digits due to the positive impacts of favorable product mix (due to growth of premium paste and power brushes, which have higher than category-average selling prices) and favorable foreign exchange, partially offset by a unit volume decrease and lower pricing (due to investments in North America and Europe). The unit volume decrease was due to a decline in Greater China (due to market contraction and competitive activity) and North America (due to competitive activity), partially offset by growth in Latin America (due to distribution gains). Organic sales also increased low single digits due to a mid-single-digit increase in Europe and a low single-digit increase in North America, partially offset by a double-digit decrease in Greater China. Global market share of the Oral Care category decreased 0.2 points.
•
Personal Health Care net sales increased mid-single digits due to the positive impacts of higher pricing (driven by North America and Latin America) and favorable foreign exchange, partially offset by a decrease in unit volume. The unit volume decrease was driven by a decline in North America (due to lower average incidence of cough and cold), partially offset by an increase in IMEA and Europe (both due to innovation). Organic sales increased low single digits due to a double-digit growth in Latin America and a 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 $1.5 billion as the increase in net sales was more than offset by a 90 basis-point decrease in net earnings margin. Net earnings margin decreased due to a decrease in gross margin, partially offset by a decrease in SG&A as a percentage of net sales. The gross margin decrease of 120 basis points was driven by unfavorable geographic mix and higher tariff costs, partially offset by higher pricing. SG&A as a percentage of net sales decreased primarily due to a reduction in overhead spending, partially offset by increased marketing spending.
Fabric & Home Care
Three months ended December 31, 2025, compared with three months ended December 31, 2024
Fabric & Home Care net sales increased 1% to $7.7 billion driven by favorable foreign exchange of 1% and higher pricing of 1%, partially offset by unfavorable product mix of 1%. Unit volume was unchanged. Excluding the impact of foreign exchange and acquisitions and divestitures, organic sales were unchanged. Global market share of the Fabric & Home Care segment decreased 0.2 points.
•
Fabric Care net sales increased low single digits as positive impacts from favorable foreign exchange were partially offset by negative impacts from unfavorable product mix. Unit volume was unchanged as an increase in North America (due to innovation) and Latin America (due to market growth) was offset by a decrease in Europe (due to competitive activity). Organic sales were unchanged as the impact of a high single-digit increase in Latin America was offset by the impact of a low single-digit decline in Europe. Global market share of the Fabric Care category decreased 0.6 points.
•
Home Care net sales increased low single digits driven by the positive impacts of higher pricing (primarily in North America) and favorable foreign exchange, partially offset by a decrease in unit volume. The decrease in volume was due to a decline in North America (due to a shift in customer order timing for merchandising events), partially offset by an increase in Latin America (due to innovation). Organic sales also increased low single digits driven by a low single-digit increase in Europe, partially offset by a low single-digit decline in North America. Global market share of the Home Care category increased 0.3 points.
Net earnings decreased 3% to $1.5 billion due to a 90 basis-point decrease in net earnings margin, partially offset by an increase in net sales. Net earnings margin decreased due to a decrease in gross margin, partially offset by a decrease in SG&A as a percentage of net sales. The gross margin decrease of 90 basis points was driven by unfavorable product mix and higher cost of
The Procter & Gamble Company 25
tariffs, partially offset by productivity savings. SG&A as a percentage of net sales decreased due to a decrease in overhead spending, partially offset by an increase in marketing spending.
Six months ended December 31, 2025, compared with six months ended December 31, 2024
Fabric & Home Care net sales increased 1% to $15.5 billion as the benefits of favorable foreign exchange of 1% and higher pricing of 1% were partially offset by a unit volume decline of 1%. Excluding the impact of foreign exchange and acquisitions and divestitures, organic sales were unchanged. Global market share of the Fabric & Home Care segment decreased 0.3 points.
•
Fabric Care net sales increased low single digits driven by a favorable foreign exchange impact, partially offset by a unit volume decline. The unit volume decline was driven by a decline in Europe (due to competitive activity), partially offset by an increase in Latin America (due to market growth) and North America (due to innovation). Organic sales decreased low single digits driven by 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. The decrease in volume was driven by declines in Europe (due to competitive activity) and North America (due to a shift in customer order timing for merchandising events). Organic sales also increased low single digits driven by 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 decreased 3% to $3.1 billion due to a 90 basis-point decrease in net earnings margin. Net earnings margin decreased due to a decrease in gross margin, partially offset by a decrease in SG&A as a percentage of net sales. The gross margin decrease of 100 basis points was driven by unfavorable product mix and higher tariff costs, partially offset by increased productivity savings. SG&A as a percentage of net sales decreased due to a decrease in overhead and marketing spending.
Baby, Feminine & Family Care
Three months ended December 31, 2025, compared with three

months ended December 31, 2024
Baby, Feminine & Family Care net sales decreased 3% to $5.1 billion driven by a unit volume decline of 5%, partially offset by favorable foreign exchange of 1%. Excluding the impacts of foreign exchange and acquisitions and divestitures, organic sales decreased 4%. Global market share of the Baby, Feminine & Family Care segment decreased 0.3 points.
•
Baby Care net sales were unchanged as positive impacts of favorable foreign exchange and higher pricing (primarily in North America) were offset by a unit volume decline and unfavorable geographic mix. The unit volume decrease was driven by a decline in North America (due to competitive activity), partially offset by an increase in Europe (due to distribution gains) and Greater China (due to innovation). 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 net sales increased low single digits as the positive impacts of innovation-driven pricing (primarily in North America), favorable foreign exchange and premium product mix were partially offset by a unit volume decline. The unit volume decrease was driven by declines across all regions, led by North America (due to share losses) and Europe and IMEA (both due to competitive activity). Organic sales decreased low single digits led by a mid-single-digit decline in IMEA and a low single-digit decline in Europe. Global market share of the Feminine Care category decreased 0.2 points.
•
Net sales in Family Care, which is predominantly a North America business, decreased double digits driven by a unit volume decrease (due to strong consumption offtake and retail inventory build in the prior year) and lower pricing (due to merchandising investments). Organic sales also decreased double digits. North America market share of the Family Care category decreased 1.1 points.
Net earnings decreased 9% to $1.0 billion due to a decrease in net sales and a 120 basis-point decrease in net earnings margin. Net earnings margin decreased due to a decrease in gross margin and an increase in SG&A as a percentage of net sales. The gross margin decrease of 70 basis points was primarily due to unfavorable category mix and higher cost of tariffs, partially offset by lower commodity costs and productivity savings. SG&A as a percentage of net sales increased primarily due to an increase in marketing spending.
Six months ended December 31, 2025, compared with six months ended December 31, 2024
Baby, Feminine & Family Care net sales decreased 1% to $10.3 billion driven by a unit volume decline of 3%, partially offset by favorable foreign exchange of 1% and favorable category mix of 1%. Excluding the impacts of foreign exchange and acquisitions and divestitures, organic sales decreased 2%. Global market share of the Baby, Feminine & Family Care segment decreased 0.2 points.
•
Baby Care net sales increased low single digits driven by favorable foreign exchange, partially offset by a unit volume decline. The unit volume decline was driven by a decrease in North America (due to competitive activity), partially offset by an increase in Greater China (due to innovation) and Europe (due to distribution gains). Organic sales were unchanged as a 20% increase in Greater China and a low single-digit increase in Europe were offset by a mid-single-digit decline in North America. Global market share of the Baby Care category increased 0.4 points.
26 The Procter & Gamble Company
•
Feminine Care net sales increased low single digits. Positive impacts of favorable foreign exchange, higher pricing (primarily in North America) and favorable geographic mix were partially offset by a decrease in unit volume. The unit volume decrease was driven by declines across all regions, led by IMEA (due to competitive activity), North America (due to share losses) and Greater China (due to market contraction). Organic sales were unchanged as a low single-digit growth in North America was offset by a high single-digit decline in IMEA and a low single-digit decline in Europe. Global market share of the Feminine Care category decreased 0.1 points.
•
Net sales in Family Care, which is predominantly a North America business, decreased mid-single digits driven by a unit volume decrease (due to strong consumption offtake and retail inventory build in the prior year) and lower pricing (due to merchandising investments). Excluding the impact of foreign exchange, organic sales also decreased mid-single digits. North America market share of the Family Care category decreased 0.9 points.
Net earnings decreased 3% to $2.1 billion due to a decrease in net sales and a 40 basis-point decline in net earnings margin. Net earnings margin decreased due to a decrease in gross margin, partially offset by a decrease in SG&A as a percentage of net sales. Gross margin decreased 30 basis points due to unfavorable category mix and higher tariff costs, partially offset by productivity savings and lower commodity costs. SG&A as a percentage of net sales decreased due a decrease in overhead spending, partially offset by an increase in marketing spending.
Corporate
Corporate includes certain operating and non-operating activities not allocated to specific business segments. These include but are not limited to incidental businesses managed at the corporate level, gains and losses related to certain divested brands or businesses, impacts from various financing and investing activities, certain impacts related to employee benefits, asset impairments and restructuring activities including manufacturing and workforce optimization. Corporate also includes reconciling items to adjust the accounting policies used within the reportable segments to U.S. GAAP. The most notable ongoing reconciling item is income taxes, which adjusts the blended statutory rates that are reflected in the reportable segments to the overall Company effective tax rate.
For the three months ended December 31, 2025, Corporate net sales increased $1 million to $160 million. Corporate net earnings decreased $137 million to a loss of $161 million for the quarter due primarily to incremental restructuring charges in the current year.
For the six months ended December 31, 2025, Corporate net sales increased $80 million to $402 million. Corporate net earnings increased $606 million to a loss of $125 million due primarily to restructuring charges related to the substantial liquidation of operations in certain Enterprise Markets, including Argentina, in the prior year period, partially offset by current year restructuring charges.
LIQUIDITY & CAPITAL RESOURCES
Operating Activities
Operating cash flow was $10.4 billion fiscal year to date, an increase of $1.3 billion versus the prior year period. 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 $11.1 billion of operating cash flow. Working capital and other impacts consumed $753 million of cash in the period. Accounts receivable increased, consuming $92 million of cash. Days sales outstanding decreased by one day. Total inventories increased, consuming $255 million of cash, driven primarily by increased safety stock levels and new product initiatives. Days inventory on hand decreased by one day. Trade payables generated $239 million of cash, driven primarily by increased supply chain activity in line with the increase in inventory and increased marketing support activity. Other impacts consumed additional cash of $645 million primarily driven 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
Investing activities used $2.8 billion of cash fiscal year to date primarily driven by capital expenditures.
Financing Activities
Financing activities used $6.3 billion of net cash fiscal year to date, mainly due to dividends to shareholders and treasury stock purchases, partially offset by a net debt increase.
As of December 31, 2025, our current liabilities exceeded current assets by $10.1 billion. We anticipate being able to support our short-term liquidity and operating needs largely through cash generated from operations. We have strong short- and long-term debt ratings that have enabled and should continue to enable us to refinance our debt as it becomes due at favorable rates in commercial paper and bond markets. In addition, we have agreements with a diverse group of financial institutions that, if needed, should provide sufficient funding to meet short-term financing requirements.
MEASURES NOT DEFINED BY U.S. GAAP
In accordance with the SEC's Regulation S-K Item 10(e), the following provides definitions of the non-GAAP measures and the reconciliation to the most closely related GAAP measure. We believe that these measures provide useful perspective on
The Procter & Gamble Company 27
underlying business trends (i.e., trends excluding non-recurring or unusual items) and results and provide a supplemental measure of period-to-period results. The non-GAAP measures described below are used by management in making operating decisions, allocating financial resources and for business strategy purposes. These measures may be useful to investors, as they provide supplemental information about business performance and provide investors a view of our business results through the eyes of management. These measures are also used to evaluate senior management and are a factor in determining their at-risk compensation. These non-GAAP measures are not intended to be considered by the user in place of the related GAAP measures but rather as supplemental information to our business results. These non-GAAP measures may not be the same as similar measures used by other companies due to possible differences in method and in the items or events being adjusted.
Organic sales growth.
Organic sales growth is a non-GAAP measure of sales growth excluding the impacts of acquisitions and divestitures and foreign exchange from year-over-year comparisons. We believe this measure provides investors with a supplemental understanding of underlying sales trends by providing sales growth on a consistent basis. This measure is used in assessing the achievement of management goals for at-risk compensation.
The following tables provide a numerical reconciliation of net sales growth to organic sales growth:
Three Months Ended December 31, 2025 Net Sales Growth Foreign Exchange Impact Acquisition & Divestiture Impact/Other (1) Organic Sales Growth
Beauty 5 % (1) % — % 4 %
Grooming 2 % (2) % — % — %
Health Care 5 % (2) % — % 3 %
Fabric & Home Care 1 % (1) % — % — %
Baby, Feminine & Family Care (3) % (1) % — % (4) %
Total Company 1 % (1) % — % — %
(1) Acquisition & Divestiture Impact/Other includes the volume and mix impact of acquisitions and divestitures and rounding impacts necessary to reconcile net sales to organic sales.

Six Months Ended December 31, 2025 Net Sales Growth Foreign Exchange Impact Acquisition & Divestiture Impact/Other (1) Organic Sales Growth
Beauty 6 % (1) % — % 5 %
Grooming 4 % (2) % — % 2 %
Health Care 4 % (2) % — % 2 %
Fabric & Home Care 1 % (1) % — % — %
Baby, Feminine & Family Care (1) % (1) % — % (2) %
Total Company 2 % (1) % — % 1 %
(1) Acquisition & Divestiture Impact/Other includes the volume and mix impact of acquisitions and divestitures and rounding impacts necessary to reconcile net sales to organic sales.

Adjusted free cash flow.
Adjusted free cash flow is defined as operating cash flow less capital spending and excluding payments for the transitional tax resulting from the 2017 U.S. Tax Act. Adjusted free cash flow represents the cash that the Company is able to generate after taking into account planned maintenance and asset expansion. We view adjusted free cash flow as an important measure because it is one factor used in determining the amount of cash available for dividends, share repurchases, acquisitions and other discretionary investments.
The following table provides a numerical reconciliation of adjusted free cash flow ($ millions):
Six Months Ended December 31, 2025
Operating Cash Flow Capital Spending 2017 U.S. Tax Act Payments Adjusted Free Cash Flow
$ 10,380 $ (2,367) $ 688 $ 8,701

Adjusted free cash flow productivity.
Adjusted free cash flow productivity is defined as the ratio of adjusted free cash flow to net earnings. We view adjusted free cash flow productivity as a useful measure to help investors understand P&G’s ability to generate cash. Adjusted free cash flow productivity is used by management in making operating decisions, in allocating financial resources and for budget planning purposes. This measure is also used in assessing the achievement of management goals for at-risk compensation.
28 The Procter & Gamble Company
The following table provides a numerical reconciliation of adjusted free cash flow productivity ($ millions):
Six Months Ended December 31, 2025
Adjusted Free Cash Flow Net Earnings Adjusted Free Cash Flow Productivity
$ 8,701 $ 9,112 95 %

Core EPS.
Core EPS is a measure of the Company's diluted EPS excluding items that are not judged by management to be part of the Company's sustainable results or trends. Management views this non-GAAP measure as a useful supplemental measure of Company performance over time. This measure is also used in assessing the achievement of management goals for at-risk compensation. The Core earnings measures included in the following reconciliation tables refer to the equivalent GAAP measures adjusted as applicable for the following items:
•
Incremental restructuring:
The Company has historically had an ongoing level of restructuring activities of approximately $250 - $500 million before tax. On June 5, 2025, the Company announced a portfolio and productivity plan to streamline its portfolio and organization to improve its cost structure and competitiveness. In the fiscal year ended June 30, 2024, the Company started a limited market portfolio restructuring of its business operations, primarily in certain Enterprise Markets, including Argentina and Nigeria, to address challenging macroeconomic and fiscal conditions. During the period ended September 30, 2024, the Company completed this limited market portfolio restructuring with the substantial liquidation of its operations in Argentina. The adjustment to Core earnings includes the restructuring charges that exceed the normal, recurring level of restructuring charges.
We do not view the above items to be part of our sustainable results, and their exclusion from Core earnings measures provides a more comparable measure of year-on-year results. This item is also excluded when evaluating senior management in determining their at-risk compensation.
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES Reconciliation of Non-GAAP Measures
Three Months Ended December 31, 2025 Three Months Ended December 31, 2024
Amounts in millions except per share amounts As Reported (GAAP) Incremental Restructuring Core (Non-GAAP) As Reported (GAAP) (1)
Cost of products sold $ 10,834 $ (152) $ 10,681 $ 10,418
Selling, general and administrative expense 6,008 (144) 5,864 5,723
Operating income 5,366 296 5,662 5,741
Other non-operating income/(expense), net 160 23 183 224
Income taxes 1,090 59 1,149 1,187
Net earnings 4,331 261 4,592 4,659
Less: Net earnings attributable to noncontrolling interests 12 15 27 29
Net earnings attributable to P&G 4,319 246 4,565 4,630
Core EPS
Diluted net earnings per common share (2) $ 1.78 $ 0.10 $ 1.88 $ 1.88
(1) For the three months ended December 31, 2024, there were no adjustments to or reconciling items for Core EPS. (2) Diluted net earnings per common share are calculated on Net earnings attributable to Procter & Gamble.
CHANGE VERSUS YEAR AGO
Net earnings attributable to P&G (7) %
Core net earnings attributable to P&G (1) %
Diluted net earnings per common share (5) %
Core EPS — %

The Procter & Gamble Company 29
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES Reconciliation of Non-GAAP Measures
Six Months Ended December 31, 2025
Amounts in millions except per share amounts As Reported (GAAP) Incremental Restructuring Core (Non-GAAP)
Cost of products sold $ 21,721 $ (191) $ 21,529
Selling, general and administrative expense 11,651 (221) 11,430
Operating income 11,222 412 11,634
Other non-operating income/(expense), net 427 31 458
Income taxes 2,343 82 2,425
Net earnings 9,112 361 9,472
Less: Net earnings attributable to noncontrolling interests 42 15 57
Net earnings attributable to P&G 9,070 346 9,415
Core EPS
Diluted net earnings per common share (1) $ 3.73 $ 0.14 $ 3.87
(1) Diluted net earnings per common share are calculated on Net earnings attributable to Procter & Gamble.
CHANGE VERSUS YEAR AGO
Net earnings attributable to P&G 6 %
Core net earnings attributable to P&G — %
Diluted net earnings per common share 7 %
Core EPS 2 %

THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES Reconciliation of Non-GAAP Measures
Six Months Ended December 31, 2024
Amounts in millions except per share amounts As Reported (GAAP) Incremental Restructuring Core (Non-GAAP)
Cost of products sold $ 20,839 $ 20 $ 20,859
Selling, general and administrative expense 11,242 (25) 11,216
Operating income 11,538 5 11,543
Other non-operating income/(expense), net (330) 789 459
Income taxes 2,339 (7) 2,331
Net earnings attributable to P&G 8,589 801 9,391
Core EPS
Diluted net earnings per common share (1) $ 3.49 $ 0.33 $ 3.81
(1) Diluted net earnings per common share are calculated on Net earnings attributable to Procter & Gamble.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in the Company’s exposure to market risk since June 30, 2025. Additional information can be found in Note 9, Risk Management Activities and Fair Value Measurements, of the Company's Form 10-K for the fiscal year ended June 30, 2025.
Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures
The Company’s President and Chief Executive Officer, Shailesh Jejurikar, and the Company’s Chief Financial Officer, Andre Schulten, performed an evaluation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (Exchange Act)) as of the end of the period covered by this report.
Messrs. Jejurikar and Schulten have concluded that the Company’s disclosure controls and procedures were effective to ensure that information required to be disclosed in reports we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (2) accumulated and communicated to our management, including Messrs. Jejurikar and Schulten, to allow their timely decisions regarding required disclosure.
30 The Procter & Gamble Company
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the Company’s fiscal quarter ended December 31, 2025, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The Company is subject, from time to time, to certain legal proceedings and claims arising out of our business, which cover a wide range of matters, including antitrust and trade regulation, product liability, advertising, contracts, environmental issues, patent and trademark matters, labor and employment matters and tax. In addition, SEC regulations require that we disclose certain environmental proceedings arising under Federal, State or local law when a governmental authority is a party and such proceeding involves potential monetary sanctions that the Company reasonably believes will exceed a certain threshold ($1 million or more).
There were no material changes during the quarter ended December 31, 2025, to our disclosure in Part I, Item 3, “Legal Proceedings” of our Form 10-K for the fiscal year ended June 30, 2025. There were no relevant matters to disclose under this Item for this period.
Item 1A. Risk Factors

For information on risk factors, please refer to "Risk Factors" in Part I, Item 1A of the Company's Form 10-K for the fiscal year ended June 30, 2025.
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities

ISSUER PURCHASES OF EQUITY SECURITIES
Period Total Number of Shares Purchased (1) Average Price Paid per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3) Approximate Dollar Value of Shares That May Yet Be Purchased Under Our Share Repurchase Program
10/01/2025 - 10/31/2025 — $ — — (3)
11/01/2025 - 11/30/2025 4,242,794 147.29 4,242,794 (3)
12/01/2025 - 12/31/2025 11,303,929 143.72 11,303,929 (3)
Total 15,546,723 $144.70 15,546,723 (3)

(1)
All transactions are reported on a trade date basis and were made in the open market with large financial institutions. This table excludes shares withheld from employees to satisfy tax withholding requirements on option exercises and other equity-based transactions. The Company administers cashless exercises through an independent third party and does not repurchase stock in connection with cashless exercises.
(2)
Average price paid per share for open market transactions excludes commission.
(3)
In accordance with the repurchase program announced on July 29, 2025, the Company reaffirmed in its earnings release on January 22, 2026, that it expects to reduce outstanding shares through direct share repurchases at a value of approximately $5 billion in fiscal year 2026, notwithstanding any purchases under the Company's compensation and benefit plans. Purchases may be made in the open market and/or private transactions and purchases may be increased, decreased or discontinued at any time without prior notice. The share repurchases are authorized pursuant to a resolution issued by the Company's Board of Directors and are expected to be financed by a combination of operating cash flows and issuance of debt.
    
Item 5. Other Information

During the three months ended December 31, 2025, none of our directors or officers
adopted
or
terminated
a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" as defined in Item 408 of Regulation S-K.
The Procter & Gamble Company 31
Item 6. Exhibits

3.1 Amended Articles of Incorporation (as amended by shareholders at the annual meeting on October 11, 2011 and consolidated by the Board of Directors on April 8, 2016) (Incorporated by reference to Exhibit (3-1) of the Company's Form 10-K for the year ended June 30, 2016)
3.2 Regulations (as approved by the Board of Directors on December 13, 2022, pursuant to authority granted by shareholders at the annual meeting on October 13, 2009) (Incorporated by reference to Exhibit (3-2) of the Company’s Current Report on Form 8-K filed December 13, 2022)
4.1 Indenture, dated as of September 3, 2009, between the Company and Deutsche Bank Trust Company Americas, as Trustee (Incorporated by reference to Exhibit (4-1) of the Company's Annual Report on Form 10-K for the year ended June 30, 2015)
31.1 Rule 13a-14(a)/15d-14(a) Certification – Chief Executive Officer +
31.2 Rule 13a-14(a)/15d-14(a) Certification – Chief Financial Officer +
32.1 Section 1350 Certifications – Chief Executive Officer +
32.2 Section 1350 Certifications – Chief Financial Officer +
101.SCH (1) Inline XBRL Taxonomy Extension Schema Document
101.CAL (1) Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF (1) Inline XBRL Taxonomy Definition Linkbase Document
101.LAB (1) Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE (1) Inline XBRL Taxonomy Extension Presentation Linkbase Document
104 Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

+ Filed herewith
(1) Pursuant to Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 or 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
THE PROCTER & GAMBLE COMPANY
January 22, 2026 /s/ MATTHEW W. JANZARUK
Date (Matthew W. Janzaruk)
Senior Vice President - Chief Accounting Officer (Principal Accounting Officer)