PG · 10-K · 2026A · Full report
Operating Expense Trends
PROCTER & GAMBLE Co · 2026-08-04 · Importance 49 · Surprise 32 · From source text
Total SG&A increased 6% to $23.9 billion in fiscal 2026 and rose 60 basis points to 27.5% of net sales. Marketing spending increased 80 basis points of sales, partly offset by productivity savings, while overhead costs as a percentage of sales were unchanged because wage inflation and restructuring spending were offset by productivity savings. Productivity-driven cost savings provided a 160-basis-point benefit to SG&A as a percentage of sales. Operating income fell $703 million, or 3%, to $19.748 billion, and operating margin declined 160 basis points to 22.7% as higher SG&A compounded the gross-margin decline.
Key facts
- Cost of products sold was $43,362 million as reported and $42,927 million on a Core (non-GAAP) basis after adjusting $436 million of incremental restructuring. source
- Selling, general and administrative expense was $23,922 million as reported and $23,608 million on a Core (non-GAAP) basis after adjusting $313 million of incremental restructuring. source
- Total SG&A increased 6% to $23.9 billion and increased 60 basis points to 27.5% of net sales due primarily to an increase in marketing spending as a percentage of net sales. source
- Operating income decreased 3% to $19,748 million in fiscal 2026. source
- For 2026, the average return on assets assumptions were 6.0% for pension plan assets and 8.5% for OPRB assets; a 100 bps change in both would impact annual after-tax benefit/expense by approximately $160 million. source
- The average discount rate on defined benefit pension plans was 4.6%; a 100 basis-point change would impact annual after-tax benefit expense by approximately $35 million. source
- The average discount rate on the OPRB plan was 6.0%; a 100 basis-point change would impact annual after-tax OPRB expense by approximately $20 million. source
- Income taxes were $4,233 million as reported and $4,158 million on a Core (non-GAAP) basis after an $81 million adjustment. source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| operating_income | negative | realized | -0.8% | Operating income decreased 3% to $19,748 million in fiscal 2026. |
| operating_income | negative | realized | -0.5% | Cost of products sold was $43,362 million as reported and $42,927 million on a Core (non-GAAP) basis after adjusting $436 million of… |
| operating_income | negative | realized | -0.4% | Selling, general and administrative expense was $23,922 million as reported and $23,608 million on a Core (non-GAAP) basis after adjusting… |
| net_income | mixed | contingent | 0.0% | For 2026, the average return on assets assumptions were 6.0% for pension plan assets and 8.5% for OPRB assets; a 100 bps change in both… |
| net_income | mixed | contingent | 0.0% | The average discount rate on defined benefit pension plans was 4.6%; a 100 basis-point change would impact annual after-tax benefit… |
| net_income | mixed | contingent | 0.0% | The average discount rate on the OPRB plan was 6.0%; a 100 basis-point change would impact annual after-tax OPRB expense by approximately… |