According to the latest financial report released by Procter & Gamble (PG.US), although its net sales reached $20.53 billion, slightly lower than the market estimate of $20.74 billion, the core earnings per share reached $1.40, exceeding the market expectation of $1.37. However, compared with the same period last year, P&G's net income decreased from $3.38 billion to $3.14 billion, and earnings per share also dropped from $1.37 to $1.27. The increase in gross margin mentioned in the financial report is due to the decrease in commodity costs and the increase in product prices. In the quarter ending June 30th, P&G's organic sales growth was 2%, which is the lowest growth rate in six years, below the analyst average expected growth rate of 3.4%.

P&G expects its core earnings per share for the 2025 fiscal year to range from $6.91 to $7.05, which is basically in line with the market expectation of $6.97. The company's sales growth forecast range is 2% to 4%, while the market expectation is $86.88 billion, indicating a growth of 3.4%; the growth forecast for organic sales is 3% to 5%, and the market's average growth rate is about 3.9%.

Although P&G's stock price has risen 16% this year, slightly higher than the S&P 500 index, the company's stock price fell 5.34% after the financial report was released.

P&G's growth model, which has relied mainly on price increases, is gradually weakening in recent years. This is because consumers are starting to reduce their purchases of essential goods and groceries. In the recent quarterly financial report, compared with a year ago, the product prices of P&G have increased by only 1%, which is the lowest increase in almost three years. In addition, Kimberly-Clark Corp. reported lower-than-expected quarterly sales last week for the same reason of the slowdown in price increases.

In terms of products, the price of P&G's Tide laundry detergent in the United States decreased year-on-year due to promotional activities, although the company hopes to increase market share through new cold-water washing formulations. In addition, the high-end SK-II facial product series under P&G is facing pressure in China, with a decline in sales this quarter, affecting the performance of the skincare and personal care product categories.

P&G's diaper business is also facing challenges, with organic sales of the related business down 1% this quarter due to weak demand and a decline in market share of the Luvs brand. In the face of this challenge, P&G's CFO, Andre Schulten, said that due to supply chain constraints, P&G has had to delay the launch of the new Luvs Platinum diaper, but he expects the business to resume growth with the launch of the new product.

Schulten further explained, "Supply chain constraints have been a hindrance to our innovation capabilities, which has particularly impacted Luvs, a brand that is positioned in the mid-market and renowned for its high cost performance." However, he also expressed optimism about the future, stating, "With the launch and sales of Luvs Platinum diapers, we are confident that the business will regain momentum."

Under the dual pressure of the market and costs, P&G is responding to challenges by innovating its products and adjusting its market strategies, in order to maintain growth momentum in the highly competitive consumer goods market.