The trade war impacts consumer demand, Procter & Gamble significantly lowers its full-year performance guidance

Against the backdrop of increasingly unclear tariff policies, on Thursday, consumer goods giant Procter & Gamble significantly lowered its full-year sales and profit expectations, reporting a larger-than-expected decline in net sales for the third quarter.

On the 24th, Procter & Gamble announced its performance estimates for the full year 2025:

• Core earnings per share are expected to increase by +2% to +4%, down from the previous estimate of +5% to +7%;
• Organic revenue is expected to be approximately +2%, down from the previous estimate of +3% to +5%;
• Core earnings per share are expected to be between $6.72 and $6.82, down from the previous estimate of $6.91 to $7.05.

As a barometer of the consumer goods industry, Procter & Gamble currently expects total net sales for fiscal year 2025 to be roughly flat compared to the previous fiscal year, far below the earlier growth target of 2% to 4%.

Trump's comprehensive import tariff policy has caused turmoil in the global market, raising concerns about a recession in the U.S. As Procter & Gamble's largest market, the United States is experiencing a noticeable deterioration in consumer sentiment, with Procter & Gamble particularly noting that U.S. consumers significantly reduced spending in February and March.

Before the U.S. stock market opened, Procter & Gamble's shares fell more than 2%.

Under the Shadow of Tariffs, Supply Chains Are Under Pressure, Cost Pressures Intensify

Procter & Gamble's third-quarter financial report released on the same day showed:

• Net sales for the third quarter fell 2% to $19.78 billion, significantly below analysts' expectations of $20.11 billion. According to LSEG data, the market had originally expected sales to decline by only 0.44%.
• Core earnings per share for the third quarter were $1.54, with the market estimate at $1.53.
• Adjusted free cash flow for the third quarter was $2.85 billion, with the market estimate at $3.69 billion.

A company spokesperson stated, Procter & Gamble particularly noted that U.S. consumers significantly reduced spending in February and March. Procter & Gamble raised prices by 1% this quarter, but sales volume declined by 1%. Company executives had previously stated that they would reduce reliance on price increases to grow sales, but the situation has become more complicated under the pressure of tariff policies.

Procter & Gamble imports raw materials, packaging materials, and some finished products from overseas to the United States, and its products manufactured in the U.S. and exported to Canada may also be affected by tariffs.

However, the spokesperson emphasized that about 90% of the products sold by Procter & Gamble in the U.S. are produced domestically. Nevertheless, Procter & Gamble had previously indicated that it might have to raise prices to offset the impact of tariffs.

Procter & Gamble is not the only consumer goods giant struggling in the current economic environment. Competitor Reckitt reported on Wednesday that its sales volume in Europe and North America had declined. Cleaning tissue manufacturer Kimberly-Clark also lowered its annual profit expectations earlier this week, stating that it would incur approximately $300 million in costs this year due to trade tariffs.

However, there has been a noticeable divergence within the industry. Nestlé and Unilever both reported quarterly sales that exceeded market expectations, with the former benefiting from higher prices in its packaged food business and the latter relying on strong performance from top brands like Dove soap and Vaseline