PG · 8-K · 20261022PR000250

Gross Margin Drivers

PROCTER & GAMBLE Co · 2026-10-22 · Importance 25 · Surprise 32 · From source text

Reported gross margin declined 160 basis points year over year to 49.8%, while core gross margin declined 150 basis points to 50.0%. Higher commodity costs reduced margin by 140 basis points, product reinvestments reduced it by 140 basis points, and unfavorable mix reduced it by 50 basis points. Gross productivity savings added 120 basis points, lower tariff costs and recognized recoveries added 50 basis points, and pricing added 20 basis points. Cost of products sold increased 7% to $11.678 billion despite 4% sales growth.

Key facts

• Cost of products sold for the quarter was $11,678 million, up 7% versus prior year. source
• Gross profit for the quarter was $11,598 million, up 1% versus prior year. source
• Additional gross margin drivers included 50 basis points of unfavorable mix and 10 basis points of rounding and other items, partially offset by 120 basis points of gross productivity savings, 50 basis points of tariff impact from lower costs and recognized recoveries and 20 basis points of increased pricing. source
• Reported gross margin for the quarter decreased 160 basis points versus the prior year. source
• Core gross margin and currency-neutral Core gross margin for the quarter decreased 150 basis points versus the prior year and excluded the impact from incremental restructuring charges. source

Impact estimates