What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-01-22 compared with 2024-10-18 · 360 added, 150 removed, 281 unchanged (64% of the section changed)

17 unchanged sentences

(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 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

(11) the ability to rely on and maintain key company and third-party information and operational technology systems, networks and services and maintain the security and functionality of such

Amounts in millions of dollars except per share amounts or as otherwise specified.

14 The Procter & Gamble Company

epidemics, pandemics or similar widespread public health concerns;

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;

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The MD&A is organized in the following sections:

• Summary of Results – Three Months Ended September 30, 2024

• Summary of Results – Six Months Ended December 31, 2024

• Economic Conditions and Uncertainties

• Results of Operations – Three Months Ended September 30, 2024

• Segment Results – Three Months Ended September 30, 2024

• Results of Operations – Three and Six Months Ended December 31, 2024

• Segment Results – Three and Six Months Ended December 31, 2024

• Liquidity and Capital Resources

8 unchanged sentences

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 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.

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.

2 unchanged sentences

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 approximately 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.

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 approximately 70 countries.

We have on-the-ground operations in about 70 countries.

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-

The Procter & Gamble Company 15

premium, premium, mid-tier and value-tier products).

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.

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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 months ended September 30, 2024:

Three Months Ended September 30, 2024

Net Sales Net Earnings

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, 2024:

Three Months Ended December 31, 2024 Six Months Ended December 31, 2024

Net Sales Net Earnings Net Sales Net Earnings

Beauty 18 % 18 % 18 % 18 %

9 unchanged sentences

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.

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

Consistent with our historical policies for ongoing restructuring-type activities, resulting charges were funded by and included

16 The Procter & Gamble Company

reported as non-core charges.

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.

SUMMARY OF RESULTS – Three Months Ended September 30, 2024

The following are highlights of results for the three months ended September 30, 2024, versus the three months ended September 30, 2023:

• Net sales decreased 1% to $21.7 billion versus the prior year period.

Net sales increased 2% in Health Care, 1% in Fabric & Home Care and decreased 5% in Beauty and 2% in Baby, Feminine & Family Care.

SUMMARY OF RESULTS – Six Months Ended December 31, 2024

The following are highlights of results for the six months ended December 31, 2024, versus the six months ended December 31, 2023:

• Net sales increased 1% to $43.6 billion versus the prior year period.

Net sales increased 2% in Health Care, 1% in Fabric & Home Care and Baby, Feminine & Family Care and decreased 3% in Beauty.

Net sales in Grooming were unchanged.

Organic sales, which exclude the impacts of acquisitions and divestitures and foreign exchange, increased 2%.

Organic sales increased 4% in Health Care, 3% in Grooming and Fabric & Home Care and decreased 2% in Beauty.

Organic sales in Baby, Feminine & Family Care were unchanged.

• Net earnings were $4.0 billion, a decrease of $569 million, or 12%, versus the prior year period due primarily to higher restructuring charges related to the substantial liquidation of operations in certain Enterprise Markets, including Argentina.

• Net earnings attributable to Procter & Gamble were $4.0 billion, a decrease of $562 million, or 12%, versus the prior year period.

• Diluted EPS decreased 12% to $1.61 due to the decrease in net earnings.

Core EPS, which excludes incremental restructuring charges, increased 5% to $1.93.

Organic sales increased 3% in Health Care, Fabric & Home Care and Grooming and increased 2% in Baby, Feminine & Family Care.

Organic sales in Beauty were unchanged.

• Net earnings were $8.6 billion, an increase of $597 million, or 7%, versus the prior year period due to the non-cash impairment charge of $1.3 billion ($1.0 billion after tax) on the Gillette intangible asset in the prior year, partially offset by higher restructuring charges in the current year of $0.8 billion after tax related to the substantial liquidation of operations in certain Enterprise Markets, including Argentina.

• Net earnings attributable to Procter & Gamble were $8.6 billion, an increase of $601 million, or 8%, versus the prior year period.

• Diluted EPS increased 8% to $3.49 due to the increase in net earnings.

Core EPS, which excludes incremental restructuring charges and the prior year Gillette intangible asset impairment charge, increased 4% to $3.81.

• Operating cash flow was $9.1 billion.

15 unchanged sentences

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 US dollar, which have negatively impacted net sales, net earnings and cash flows.

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.

13 unchanged sentences

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

The Procter & Gamble Company 17

and import authorizations as well as government policies related to environmental and climate change matters and changes to international trade agreements can also impact our financial performance.

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 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, 2024.

RESULTS OF OPERATIONS – Three Months Ended September 30, 2024

The following discussion provides a review of results for the three months ended September 30, 2024, versus the three months ended September 30, 2023.

Three Months Ended September 30

RESULTS OF OPERATIONS – Three Months Ended December 31, 2024

The following discussion provides a review of results for the three months ended December 31, 2024, versus the three months ended December 31, 2023.

Three Months Ended December 31

Amounts in millions, except per share amounts 2024 2023 % Chg

6 unchanged sentences

Core net earnings per common share 1.88 1.84 2%

Three Months Ended September 30

Three Months Ended December 31

COMPARISONS AS A PERCENTAGE OF NET SALES 2024 2023 Basis Pt Chg

5 unchanged sentences

Net earnings attributable to Procter & Gamble 21.2 % 16.2 % 500

Net sales for the quarter decreased 1% to $21.7 billion as increased pricing of 1% was more than fully offset by unfavorable foreign exchange of 1% and rounding impacts.

Unit volume and mix had a neutral impact on net sales.

Net sales for the quarter increased 2% to $21.9 billion as unit volume and mix each increased 1%.

Pricing and foreign exchange had a neutral impact on net sales.

Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales increased 3% and organic volume increased 2%.

1 unchanged sentence

Net Sales Change Drivers 2024 vs.

2023 (Three Months Ended September 30) (1)

2023 (Three Months Ended December 31) (1)

Volume with Acquisitions & Divestitures Volume Excluding Acquisitions & Divestitures Foreign Exchange Price Mix Other (2)

9 unchanged sentences

Operating Costs

Gross margin increased 10 basis points to 52.1% of net sales for the quarter.

The increase in gross margin was due to:

Gross margin decreased 30 basis points to 52.4% of net sales for the quarter.

The decrease in gross margin was due to:

• 110 basis points of decline from unfavorable product mix,

• 50 basis points of higher commodity costs,

18 The Procter & Gamble Company

• 20 basis points of product and packaging investments,

• 20 basis points of higher transportation services costs and

• 10 basis points of unfavorable foreign exchange impacts.

These impacts were partially offset by:

• 150 basis points of manufacturing productivity savings and

• 30 basis points of increase due to higher pricing.

These impacts were partially offset by:

Total SG&A spending increased 4% to $5.7 billion versus the prior year period due to increased marketing spending and overhead costs.

SG&A as a percentage of net sales increased 40 basis points to 26.2% due to an increase in marketing spending and overhead costs as a percentage of net sales.

Marketing spending as a percentage of net sales increased 10 basis points as the increase in marketing spending was partially offset by the positive scale impacts of the net sales increase and productivity savings.

Overhead costs as a percentage of net sales increased 40 basis points as wage inflation and foreign exchange were partially offset by the positive scale impacts of the net sales increase and productivity savings.

Other operating expenses as a percentage of net sales was unchanged.

Productivity-driven cost savings delivered 110 basis points of benefit to SG&A as a percentage of net sales.

Operating income increased $1.3 billion, or 30%, to $5.7 billion and operating margin increased 550 basis points to 26.2% versus the prior year period primarily due to the non-cash impairment charge of $1.3 billion ($1.0 billion after tax) on the Gillette intangible asset in the prior year, as well as the increase in net sales, partially offset by the decrease in gross margin, the components of which are described above.

Non-Operating Expenses and Income

Interest expense was $240 million for the quarter, a decrease of $8 million versus the prior year period.

Interest income was $119 million for the quarter, a decrease of $14 million versus the prior year period.

Other non-operating income/(expense) was $224 million, which is an increase of $47 million versus the prior year period due to an increase in the net periodic benefit credit for postretirement benefits.

The effective income tax rate for the three months ended December 31, 2024, was 20.3%, compared to 22.3% for the three months ended December 31, 2023.

The decrease in the effective tax rate was primarily driven by favorable geographic mix impacts and higher excess tax benefits of share-based compensation.

Net earnings increased $1.2 billion, or 33%, to $4.7 billion due primarily to the non-cash impairment charge of $1.3 billion ($1.0 billion after tax) on the Gillette intangible asset in the prior year.

Foreign exchange had a negative impact of approximately $45 million on net earnings for the quarter, including both transactional and translational impacts from converting earnings from foreign subsidiaries to U.S.

Net earnings attributable to Procter & Gamble increased $1.2 billion, or 34%, to $4.6 billion for the quarter.

Diluted EPS increased 34% to $1.88 versus the prior year period.

RESULTS OF OPERATIONS – Six Months Ended December 31, 2024

The following discussion provides a review of results for the six months ended December 31, 2024, versus the six months ended December 31, 2023.

Six Months Ended December 31

Amounts in millions, except per share amounts 2024

Net sales $ 43,619 $ 43,312 1%

Operating income 11,538 10,200 13%

Earnings before income taxes 10,985 10,299 7%

Net earnings 8,646 8,049 7%

Net earnings attributable to Procter & Gamble 8,589 7,988 8%

Diluted net earnings per common share 3.49 3.23 8%

Core net earnings per common share 3.81 3.66 4%

The Procter & Gamble Company 19

Six Months Ended December 31

COMPARISONS AS A PERCENTAGE OF NET SALES 2024

Gross margin 52.2 % 52.3 % (10)

Selling, general & administrative expense 25.8 % 25.7 % 10

Operating income 26.5 % 23.6 % 290

Earnings before income taxes 25.2 % 23.8 % 140

Net earnings 19.8 % 18.6 % 120

Net earnings attributable to Procter & Gamble 19.7 % 18.4 % 130

Net sales for the period increased 1% to $43.6 billion as a 1% increase in both unit volume and higher pricing was partially offset by unfavorable foreign exchange of 1%.

Mix was unchanged.

Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales increased 2%.

The following table summarizes key drivers of the change in net sales by reportable segment:

Net Sales Change Drivers 2024 vs.

2023 (Six Months Ended December 31) (1)

Volume with Acquisitions & Divestitures Volume Excluding Acquisitions & Divestitures Foreign Exchange Price Mix Other (2)

Net Sales Growth

Beauty (1) % — % (1) % 1 % (2) % — % (3) %

Grooming 3 % 4 % (2) % 1 % (2) % — % — %

Health Care (1) % — % (1) % 1 % 3 % — % 2 %

Fabric & Home Care 1 % 2 % (1) % — % 1 % — % 1 %

Baby, Feminine & Family Care 1 % 2 % — % — % — % — % 1 %

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 10 basis points to 52.2% of net sales for the period.

The decrease in gross margin was due to:

• 80 basis points of decline from unfavorable product mix,

• 70 basis points of higher commodity costs,

• 60 basis points of decline from unfavorable product mix including the decline of the super-premium SK-II brand and

• 30 basis points of product and packaging investments,

Total SG&A spending decreased 2% to $5.5 billion versus the prior year period due to a decrease in other operating expenses.

SG&A as a percentage of net sales decreased 20 basis points to 25.4% due to a decrease in other operating expenses, partially offset by an increase in marketing spending as a percentage of net sales.

Marketing spending as a percentage of net sales increased 40 basis points as the increase in marketing spending was partially offset by productivity savings.

Overhead costs as a percentage of net sales was unchanged as increased productivity savings were offset by an increase in overhead spending and foreign exchange impacts.

Other operating expenses as a percentage of net sales decreased 60 basis points due primarily to higher foreign exchange transactional charges in the prior year period.

• 20 basis points of higher transportation services and other costs and

• 10 basis points of unfavorable foreign exchange impacts.

These impacts were partially offset by:

• 170 basis points of manufacturing productivity savings,

• 20 basis points of increase due to higher pricing and

• 10 basis points of increase from gain of manufacturing scale benefits.

Total SG&A spending increased 1% to $11.2 billion versus the prior year period due to increased marketing spending and overhead costs.

SG&A as a percentage of net sales increased 10 basis points to 25.8% due to the increase in marketing spending and overhead spending as a percentage of sales.

Marketing spending as a percentage of net sales increased 30 basis points as the increase in marketing spending was partially offset by the positive scale impacts of the net sales increase and productivity savings.

Overhead costs as a percentage of net sales increased 20 basis points due to wage inflation, partially offset by the positive scale impacts of the net sales increase and 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 90 basis points of benefit to SG&A as a percentage of net sales.

Operating margin increased 30 basis points to 26.7% due to the increase in gross margin and the decrease in SG&A as a percentage of net sales, as discussed above.

Operating income increased $30 million, or 1%, to $5.8 billion for the quarter as the decrease in net sales was more than offset by the increase in operating margin, the components of which are discussed above.

Operating income increased $1.3 billion, or 13%, to $11.5 billion and operating margin increased 290 basis points to 26.5% versus the prior year period due primarily to the non-cash impairment charge of $1.3 billion ($1.0 billion after tax) on the Gillette intangible asset in the prior year, as well as the increase in net sales, partially offset by the decrease in gross margin, the components of which are described above.

20 The Procter & Gamble Company

Non-Operating Expenses and Income

Interest expense was $238 million for the quarter, an increase of $13 million versus the prior year period.

Interest income was $135 million for the quarter, an increase of $7 million versus the prior year period.

Other non-operating income/(expense) was $(554) million, which is a decrease of $686 million versus the prior year period due primarily to a non-cash charge for accumulated foreign currency translation losses due to the substantial liquidation of operations in Argentina.

The effective income tax rate for the three months ended September 30, 2024, was 22.4%, compared to 21.5% for the three months ended September 30, 2023.

The increase in the effective tax rate was driven by a 300 basis-point increase due primarily to the charge for accumulated foreign currency translation losses due to the substantial liquidation of operations in Argentina, partially offset by a 160 basis-point decrease due to higher excess tax benefits of share-based compensation and a decrease driven by favorable geographic mix impacts.

Net earnings decreased $569 million, or 12%, to $4.0 billion due primarily to the decrease in other non-operating income/(expense) discussed above.

Foreign exchange had a positive impact of approximately $61 million on net earnings for the quarter, including both transactional and translational impacts from converting earnings from foreign subsidiaries to U.S.

Net earnings attributable to Procter & Gamble decreased $562 million, or 12%, to $4.0 billion for the quarter.

Diluted EPS decreased 12% to $1.61 versus the prior year period due to the decrease in net earnings.

SEGMENT RESULTS – Three Months Ended September 30, 2024

Interest expense was $478 million for the period, an increase of $6 million versus the prior year period.

Interest income was $254 million for the period, a decrease of $8 million versus the prior year period.

Other non-operating income/(expense) was $(330) million, which is a decrease of $639 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 period ended September 30, 2024.

The effective income tax rate for the six months ended December 31, 2024, was 21.3%, compared to 21.8% for the six months ended December 31, 2023.

The decrease in the effective tax rate was primarily driven by higher excess tax benefits of share-based compensation and favorable geographic mix impacts, partially offset by a 140 basis-point increase due primarily to the charge for accumulated foreign currency translation losses due to the substantial liquidation of operations in Argentina.

Net earnings increased $597 million, or 7%, to $8.6 billion, as the increase in operating income, the components of which are described above were partially offset by the non-cash charge for accumulated foreign currency translation losses due to the substantial liquidation of operations in Argentina recorded in the period ended September 30, 2024.

Foreign exchange had a positive impact of approximately $17 million on net earnings for the period, including both transactional and translational impacts from converting earnings from foreign subsidiaries to U.S.

Net earnings attributable to Procter & Gamble increased $601 million, or 8%, to $8.6 billion for the period.

Diluted EPS increased 8% to $3.49 versus the prior year period due to the increase in net earnings.

Core EPS, which represents diluted EPS excluding charges for incremental restructuring and the impairment of the Gillette intangible asset, increased 4% to $3.81.

SEGMENT RESULTS – Three and Six Months Ended December 31, 2024

The following discussion provides a review of results by reportable business segment.

Analysis of the results for the three months ended September 30, 2024, is provided based on a comparison to the three months ended September 30, 2023.

Analysis of the results for the three and six months ended December 31, 2024, is provided based on a comparison to the three and six months ended December 31, 2023.

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 months ended September 30, 2024, versus the comparable prior year period (dollar amounts in millions):

Three Months Ended September 30, 2024

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, 2024, versus the comparable prior year period (dollar amounts in millions):

Three Months Ended December 31, 2024

Net Sales % Change Versus Year Ago Earnings/(Loss) Before Income Taxes % Change Versus Year Ago Net Earnings/(Loss) % Change Versus Year Ago

6 unchanged sentences

Total Company $ 21,882 2 % $ 5,845 30 % $ 4,659 33 %

Three months ended September 30, 2024, compared with three months ended September 30, 2023

Beauty net sales decreased 5% to $3.9 billion as negative impacts of unfavorable mix of 3% (due primarily to the decline of the

Six Months Ended December 31, 2024

Net Sales % Change Versus Year Ago Earnings/(Loss) Before Income Taxes % Change Versus Year Ago Net Earnings/(Loss) % Change Versus Year Ago

Beauty $ 7,741 (3) % $ 2,063 (13) % $ 1,620 (12) %

Grooming 3,475 — % 1,090 2 % 885 3 %

Health Care 6,397 2 % 1,928 6 % 1,499 6 %

Fabric & Home Care 15,285 1 % 4,066 — % 3,188 1 %

Baby, Feminine & Family Care 10,400 1 % 2,847 — % 2,185 — %

Corporate 322 N/A (1,009) N/A (731) N/A

Total Company $ 43,619 1 % $ 10,985 7 % $ 8,646 7 %

The Procter & Gamble Company 21

super-premium SK-II brand, which has higher than segment-average selling prices), a 2% decrease in unit volume and unfavorable foreign exchange of 1% were partially offset by positive impacts of higher pricing of 1%.

Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales decreased 2% and organic volume was unchanged.

Three months ended December 31, 2024, compared with three months ended December 31, 2023

Beauty net sales were unchanged at $3.8 billion as unit volume decline of 1% and unfavorable foreign exchange of 1% were offset by positive impacts of higher pricing of 2%.

Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales increased 2% and organic volume was unchanged.

Global market share of the Beauty segment was unchanged.

• Hair Care net sales decreased mid-single digits.

Negative impacts of divestitures, unfavorable foreign exchange and a unit volume decrease were partially offset by positive impacts of favorable geographic and brand mix (due to growth of the premium Native brand).

The volume decrease was driven by a decline in Greater China (due to market contraction in the retail channel where we have higher shares and distribution footprint changes), partially offset by growth in Latin America and Europe (due to market growth).

Organic sales increased low single digits driven by high single-digit growth in Latin America and a low single-digit growth in North America, partially offset by a mid-single-digit decline in Greater China.

Global market share of the Hair Care category decreased 0.7 points.

• Personal Care net sales increased double digits.

Positive impacts of an increase in unit volume and higher pricing (primarily in North America) were partially offset by unfavorable foreign exchange.

The volume increase was driven by growth in North America (due to innovation), Europe (due to distribution expansion and innovation), and Latin America (due to market growth).

Organic sales increased double digits due to a low teens growth in North America and a more than 20% growth in Europe, partially offset by a mid-single-digit decline in Greater China.

Global market share of the Personal Care category increased 0.8 points.

• Skin Care net sales decreased low single digits.

Negative impacts of a decrease in unit volume were partially offset by favorable mix (due primarily to the growth of the super-premium SK-II brand, which has higher than category-average selling prices), higher pricing (primarily in Greater China) and a favorable foreign exchange impact.

The volume decrease was driven by declines in all regions, led by North America (due to distribution losses) and Greater China (due to market contraction).

Organic sales decreased mid-single digits due to a 20% decline in North America and a mid-single-digit decline in Asia Pacific, partially offset by a mid-single-digit growth in Greater China.

Global market share of the Skin Care category decreased 0.7 points.

Net earnings decreased 10% to $780 million due to a 230 basis-point decline in net earnings margin.

Net sales were unchanged.

Net earnings margin decreased due to a decrease in gross margin and an increase in SG&A as a percentage of net sales, partially offset by a lower effective tax rate.

The gross margin decline was driven by negative product mix (due to the decline of premium brands) and higher commodity costs, partially offset by increased productivity savings and higher pricing.

SG&A as a percentage of net sales increased due primarily to increases in marketing and overhead spending.

The lower effective tax rate was driven by favorable geographic mix.

Six months ended December 31, 2024, compared with six months ended December 31, 2023

Beauty net sales decreased 3% to $7.7 billion, as unit volume decrease of 1%, negative impacts of unfavorable foreign exchange of 1% and unfavorable mix of 2% (due primarily to the decline of the super-premium SK-II brand, which has higher than segment-average selling prices) were partially offset by the positive impacts of higher pricing of 1%.

Excluding the impact of acquisitions and divestitures and foreign exchange, organic volume and organic sales were unchanged.

Global market share of the Beauty segment increased 0.1 points.

• Hair Care net sales decreased low single digits.

The volume decrease was driven by a decline in Greater China (due to a more prominent market contraction in the retail channel where we have higher shares), partially offset by growth in North America (due to market growth) and Asia Pacific (due to increased marketing activity).

Organic sales increased low single digits driven by double-digit growth in Latin America and a high single-digit growth in North America, partially offset by a double-digit decline in Greater China.

Negative impacts of divestitures, declining unit volume and unfavorable foreign exchange were partially offset by positive impacts of favorable brand mix (due to growth of the premium Native brand) and higher pricing (primarily in Europe and Latin America).

The decline in unit volume was driven by a decline in Greater China (due to market contraction and distribution footprint changes), partially offset by growth in North America (due to innovation) and Latin America (due to market growth).

Organic sales increased low single digits due to a high single-digit growth in Latin America and a mid-single-digit growth in North America, partially offset by a high single-digit decline in Greater China.

Global market share of the Hair Care category decreased 0.6 points.

• Personal Care net sales increased high single digits.

Positive impacts of an increase in unit volume, favorable product mix and higher pricing (primarily in North America) were partially offset by unfavorable foreign exchange.

The volume increase was driven by growth in North America (due to innovation) and Europe (due to distribution expansion and innovation), partially offset by a decline in Greater China (due to market contraction).

Organic sales increased high single digits due to a double-digit growth in North America, partially offset by a high single-digit decline in Greater China.

Positive impacts of an increase in unit volume, higher pricing (primarily in North America) and favorable product mix (due to the growth of the premium brands) were partially offset by unfavorable foreign exchange.

The volume increase was driven by growth in North America (due to innovation), Europe (due to distribution expansion and innovation), and Latin America (due to market growth), partially offset by a decline in Greater China (due to market contraction).

Organic sales increased double digits due to a more than 20% growth in Europe and a double digit growth in North America, partially offset by a mid-single-digit decline in Greater China.

Global market share of the Personal Care category increased 0.6 points.

• Skin Care net sales decreased more than 20%.

Negative impacts of a decrease in unit volume and unfavorable mix (due primarily to the decline of the super-premium SK-II brand, which has higher than category-average selling prices), were partially offset by higher pricing primarily in Greater China.

The volume decrease was driven by declines in all regions, led by Greater China (due primarily to the decline of the super-premium SK-II brand and market contraction) and North America (due to distribution losses).

Organic sales decreased more than 20% due to a more than 30% decline in Asia Pacific and a more than 20% declines in Greater China and North America.

• Skin Care net sales decreased mid-teens.

Negative impacts of a decrease in unit volume and unfavorable product mix (due primarily to the decline of the super-premium SK-II brand, which has higher than category-average selling prices), were partially offset by higher pricing (primarily in Greater China and Asia Pacific).

The volume decrease was driven by declines in all regions, led by North America (due to distribution losses) and Greater China (due to market contraction).

22 The Procter & Gamble Company

Organic sales decreased mid-teens due to 20% declines in North America and Asia Pacific and a double-digit decline in Greater China.

Global market share of the Skin Care category decreased 0.6 points

Net earnings decreased 13% to $840 million due to the decrease in net sales and a 210 basis-point decline in net earnings margin.

Net earnings decreased 12% to $1.6 billion due to a decrease in net sales and a 220 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, partially offset by a lower effective tax rate.

The gross margin decline was driven by negative product mix (due to the decline of the super-premium SK-II brand) partially offset by increased productivity savings.

SG&A as a percentage of net sales increased due primarily to the negative scale effects of the net sales decrease, partially offset by higher foreign exchange transactional charges in the prior year period.

The gross margin decline was driven by negative product mix (due to the decline of the super-premium SK-II brand) and higher commodities, partially offset by increased pricing and productivity savings.

SG&A as a percentage of net sales increased due primarily to an increase in marketing and overhead spending.

The lower effective tax rate was driven by favorable geographic mix.

Three months ended September 30, 2024, compared with three months ended September 30, 2023

Grooming net sales were unchanged at $1.7 billion as the benefits of a 4% increase in unit volume and higher pricing of 1% (driven primarily by IMEA and Asia Pacific) were partially offset by unfavorable geographic mix of 3% and unfavorable foreign exchange of 2%.

Three months ended December 31, 2024, compared with three months ended December 31, 2023

Grooming net sales increased 1% to $1.8 billion as the benefits of a 2% increase in unit volume and higher pricing of 1% (driven primarily by IMEA and Asia Pacific) were partially offset by unfavorable geographic mix of 1% and unfavorable foreign exchange of 1%.

The volume increase was driven by growth in IMEA (due to increased distribution) and Europe (due to market growth).

Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales increased 3% driven by a more than 20% growth in IMEA and a low single-digit growth in Europe, partially offset by a high single-digit decline in Greater China.

Excluding the impact of acquisitions and divestitures, organic volume increased 5%.

Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales increased 2% driven by a low teens growth in IMEA and a double-digit growth in Asia Pacific.

Global market share of the Grooming segment increased 0.3 points.

Net earnings increased 1% to $426 million due to a 30 basis-point increase in net earnings margin.

Net earnings margin increased as a decrease in SG&A as a percentage of net sales and a lower effective tax rate were partially offset by a decrease in gross margin.

The gross margin decrease was primarily driven by unfavorable geographic mix.

Net earnings increased 4% to $459 million due to an increase in net sales and an 80 basis-point increase in net earnings margin.

Net earnings margin increased as an increase in gross margin and a decrease in SG&A as a percentage of net sales were partially offset by a higher effective tax rate.

The gross margin improvement was primarily driven by increased productivity savings and increased pricing, partially offset by unfavorable geographic mix.

SG&A as a percentage of net sales decreased due primarily to higher foreign exchange transactional charges in the prior year period.

The lower effective tax rate was driven by favorable geographic mix.

Three months ended September 30, 2024, compared with three months ended September 30, 2023

Health Care net sales increased 2% to $3.1 billion driven by favorable product mix of 4% and higher pricing of 1%, partially offset by a 1% decrease in unit volume and unfavorable foreign exchange of 1%.

The higher effective tax rate was driven by unfavorable geographic mix.

Six months ended December 31, 2024, compared with six months ended December 31, 2023

Grooming net sales were unchanged at $3.5 billion driven by unit volume increase of 3% and higher pricing of 1% (driven primarily by Latin America and IMEA), offset by unfavorable geographic mix of 2% and unfavorable foreign exchange of 2%.

The volume increase was driven by growth in IMEA (due to increased distribution), Latin America (due to market growth) and Europe (due to market growth).

Excluding the impact of acquisitions and divestitures and foreign exchange, Grooming organic sales increased 3% due to high teens growth in IMEA, high single-digit growth in Asia Pacific and mid-single-digit growth in Latin America.

Organic volume increased 4%.

Global market share of the Grooming segment increased 0.6 points.

Net earnings increased 3% to $885 million due to a 60 basis-point increase in net earnings margin.

Net earnings margin increased as a decrease in SG&A as a percentage of net sales was partially offset by a decrease in gross margin.

The gross margin decrease was driven primarily by unfavorable geographic mix, partially offset by productivity savings and higher pricing.

SG&A as a percentage of net sales decreased due to higher foreign exchange transactional charges in the prior year period and reduced marketing spending.

Three months ended December 31, 2024, compared with three months ended December 31, 2023

Health Care net sales increased 2% to $3.2 billion driven by favorable product mix of 2% and higher pricing of 1%.

Unit volume and foreign exchange were unchanged.

Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales increased 3%.

Global market share of the Health Care segment increased 0.1 points.

• Oral Care net sales increased low single digits driven by the positive impacts of favorable product mix (due to growth of power brushes and premium paste, which have higher than category-average selling prices) partially offset by a decline in unit volume and unfavorable foreign exchange.

The volume decrease was driven by declines in Greater China (due to market contraction and share losses) and IMEA (due to exit of operations in certain enterprise markets), partially offset by growth in North America (due to market growth and innovation).

Organic sales increased low single digits driven by a high

Global market share of the Health Care segment was unchanged.

• Oral Care net sales increased mid-single digits driven by the positive impacts of favorable product mix (due to growth of power brushes and premium paste, which have higher than category-average selling prices).

Unit volume was unchanged as growth in North America (due to market growth and innovation) and Europe (due to distribution gains and innovation) was offset by declines in Greater China (due to market contraction and share losses) and IMEA (due to share losses).

Organic sales increased low single digits driven by a high single-digit increase in Europe and a mid-single-digit increase in North America, partially offset by a mid-teens decrease in Greater China.

Global market share of the Oral Care category increased 0.1 points.

• Personal Health Care net sales increased low single digits as higher pricing (driven by Europe and Latin America) and a unit volume increase were partially offset by negative impacts of product mix (due to the decline of respiratory products, which have higher than category-average selling prices) and unfavorable foreign exchange.

The unit volume increase was primarily due to growth in Europe (due to innovation), partially offset by a decline in IMEA (due to increased competitive activity).

Organic sales increased low single digits driven by a double-digit growth in Europe, partially offset by a low-single-digit decline in North America.

Global market share of the Personal Health Care category decreased 0.1 points.

Net earnings increased 5% to $758 million due to net sales growth and a 60 basis-point increase in net earnings margin.

Net earnings margin increased due to an increase in gross margin, partially offset by an increase in SG&A as a percentage of net sales.

The gross margin increase was driven primarily by productivity savings and higher pricing, partially offset by

The Procter & Gamble Company 23

single-digit increase in Europe and a mid-single-digit increase in North America, partially offset by a high-teens decrease in Greater China.

unfavorable product mix (due to a decline in respiratory products, which have higher than segment-average gross margins).

SG&A as a percentage of net sales increased due to an increase in overhead spending, partially offset by the positive scale impacts of the net sales increase.

Six months ended December 31, 2024, compared with six months ended December 31, 2023

Health Care net sales increased 2% to $6.4 billion driven by favorable geographic and product mix of 3% and higher pricing of 1%, partially offset by unfavorable foreign exchange of 1% and a 1% decrease in unit volume.

Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales increased 3% and organic volume was unchanged.

Global market share of the Health Care segment was unchanged.

• 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), partially offset by a decrease in unit volume.

The unit volume decrease was due to a decline in Greater China (due to market contraction and share losses) and IMEA (due to share losses), partially offset by growth in North America (due to market growth and innovation) and Europe (due to distribution expansion and innovation).

Organic sales also increased low single digits due to a high single-digit increase in Europe and a mid-single-digit increase in North America, partially offset by high teens decreases in Greater China and IMEA.

Global market share of the Oral Care category increased 0.2 points.

• Personal Health Care net sales increased low single digits as the positive impacts of favorable product mix (due to the growth of respiratory products, which have higher than category-average selling prices) and higher pricing (driven by Latin America and Asia Pacific) were partially offset by unfavorable foreign exchange.

Unit volume was unchanged as growth in North America (due to innovation and distribution gains) was offset by declines primarily in IMEA (due to increased competitive activity).

Organic sales increased mid-single digits driven by a double-digit growth in Latin America and a high single-digit growth in North America, partially offset by a mid-single-digit decline in IMEA.

• Personal Health Care net sales increased low single digits due to the positive impacts of higher pricing (driven by Latin America and Europe), favorable geographic mix and unit volume increase, partially offset by unfavorable foreign exchange.

The increase in unit volume was driven by growth in North America (due to distribution gains), Europe (due to innovation), partially offset by a decline in IMEA (due to increased competitive activity).

Organic sales increased low single digits due to mid-single-digit growth in both Europe and Latin America and low single-digit growth in North America, partially offset by a low single-digit decline in IMEA.

Global market share of the Personal Health Care category decreased 0.1 points.

Net earnings increased 8% to $741 million due to the net sales growth and a 110 basis-point increase in net earnings margin.

Net earnings margin increased due to an increase in gross margin and a decrease in SG&A as a percentage of net sales.

The gross margin increase was driven primarily by favorable product mix (due to the growth in respiratory products, which have higher than segment-average gross margins).

SG&A as a percentage of net sales decreased due to lower marketing spending and the positive scale impacts of the net sales increase.

Net earnings increased 6% to $1.5 billion due to net sales growth and a 90 basis-point increase in net earnings margin.

Net earnings margin increased due to an increase in gross margin, a decrease in SG&A as a percentage of net sales and a lower effective tax rate.

The gross margin increase was driven by productivity savings and higher pricing.

SG&A as a percentage of net sales decreased due to decreased marketing spending, higher foreign exchange transactional charges in the prior year period and the positive scale impacts of the net sales increase.

The lower effective tax rate was driven by favorable geographic mix.

Fabric & Home Care

Three months ended September 30, 2024, compared with three months ended September 30, 2023

Fabric & Home Care net sales increased 1% to $7.7 billion driven by a unit volume increase of 1% and favorable mix of 1%, partially offset by unfavorable foreign exchange of 1%.

Excluding the impact of foreign exchange and acquisitions and divestitures, organic sales increased 3%.

Three months ended December 31, 2024, compared with three months ended December 31, 2023

Fabric & Home Care net sales increased 2% to $7.6 billion driven by a unit volume increase of 1% and favorable mix of 1%.

Excluding the impact of foreign exchange and acquisitions and divestitures, organic sales increased 3% and organic volume increased 2%.

Global market share of the Fabric & Home Care segment increased 0.1 points.

• Fabric Care net sales were unchanged as the positive impact of favorable geographic mix was offset by unfavorable foreign exchange.

Volume was unchanged as growth in North America (due to innovation) and Europe (due to increased marketing support) was fully offset by declines in Latin America (due to the substantial liquidation of operations in Argentina) and Asia Pacific (due to increased pricing).

Organic sales increased low single digits driven by a high single-digit growth in Europe and a mid-single-digit growth in North America, partially offset by a low teens decline in IMEA and a double-digit decline in Latin America.

• Fabric Care net sales increased low single digits driven by an increase in unit volume and a positive impact of favorable geographic mix, partially offset by unfavorable foreign exchange.

The increase in unit volume was due to growth in North America (due to innovation) and Europe (due to innovation and increased marketing support), partially offset by declines in Latin America (due to share losses).

Organic sales increased low single digits driven by a high single-digit growth in Asia Pacific, a mid-single-digit growth in Europe and a low single-digit growth in North America, partially offset by a high single-digit decline in Latin America.

Global market share of the Fabric Care category increased 0.1 points.

• Home Care net sales increased mid-single digits driven by a unit volume increase and favorable premium product mix, partially offset by the impact of divestitures.

The increase in volume was due to growth in North America (due to innovation) and Europe (due to market growth).

Organic sales increased mid-single digits driven by a mid-single-digit growth in both North America and Europe.

Global market share of the Home Care category increased 0.3 points.

Net earnings decreased 1% to $1.6 billion as the increase in net sales was more than offset by a 60 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, partially offset by a lower effective tax rate.

The gross margin decrease was driven by unfavorable product mix, partially offset by productivity savings.

SG&A as a percentage of net sales increased due to an increase in marketing and overhead spending, partially offset by the positive scale effects of the net sales increase.

The lower effective tax rate was driven by favorable geographic mix.

Six months ended December 31, 2024, compared with six months ended December 31, 2023

Fabric & Home Care net sales increased 1% to $15.3 billion driven by a unit volume increase of 1% and favorable product mix of 1%, partially offset by unfavorable foreign exchange of 1%.

Excluding the impact of foreign exchange and acquisitions and divestitures, organic sales increased 3% and organic volume increased 2%.

Global market share of the Fabric & Home Care segment increased 0.1 points.

• Fabric Care net sales were unchanged as the positive impact of favorable premium product mix was offset by the negative impacts of unfavorable foreign exchange.

Unit volume was unchanged as growth in North America (due to market growth)

24 The Procter & Gamble Company

and Europe (due to innovation and increased marketing support) was offset by declines in Latin America and IMEA (both due to share losses).

Organic sales increased low single digits driven by a mid-single-digit increase in Europe and North America, partially offset by a high single-digit decrease in Latin America.

Global market share of the Fabric Care category decreased 0.1 points.

• Home Care net sales increased low single digits.

Positive impacts of favorable premium product mix and an increase in unit volume were partially offset by the negative impacts of unfavorable foreign exchange and divestitures.

The increase in unit volume was due primarily to growth in North America (due to market growth) and Europe (due to distribution gains), partially offset by a decline in Latin America (due to the substantial liquidation of operations in Argentina).

Organic sales increased mid-single digits driven by a high single-digit growth in Europe and mid-single-digit growth in North America.

• Home Care net sales increased mid-single digits driven by a unit volume increase and favorable premium product mix, partially offset by the impact of unfavorable foreign exchange and divestitures.

The increase in volume was due primarily to growth in North America (due to innovation) and Europe (due to market growth).

Organic sales increased mid-single digits driven by mid-single-digit growth in North America and Europe.

Global market share of the Home Care category increased 0.4 points.

Net earnings increased 3% to $1.6 billion due to the increase in net sales and a 50 basis-point improvement in net earnings margin.

Net earnings margin increased due to an increase in gross margin partially offset by an increase in SG&A as a percentage of net sales.

The gross margin increase was driven by increased productivity savings, partially offset by unfavorable foreign exchange and unfavorable mix due to the growth of premium products that have lower than segment-average gross margins.

SG&A as a percentage of net sales increased due to an increase in marketing spending, partially offset by higher foreign exchange transactional charges in the prior year period.

Net earnings increased 1% to $3.2 billion due to the increase in net sales.

Net earnings margin was unchanged as an increase in gross margin and a lower effective tax rate was fully offset by an increase in SG&A as a percentage of net sales.

The gross margin increase was driven by increased productivity savings, partially offset by unfavorable product mix.

SG&A as a percentage of net sales increased due to an increase in marketing and overhead spending, partially offset by the positive scale effects of the net sales increase and higher foreign exchange transactional charges in the prior year period.

The lower effective tax rate was driven by favorable geographic mix.

Baby, Feminine & Family Care

Three months ended September 30, 2024, compared with three months ended September 30, 2023

Baby, Feminine & Family Care net sales decreased 2% to $5.1 billion due to a 1% decrease in unit volume and unfavorable foreign exchange of 1%.

Excluding the impacts of foreign exchange and acquisitions and divestitures, organic sales were unchanged.

Three months ended December 31, 2024, compared with three months ended December 31, 2023

Baby, Feminine & Family Care net sales increased 3% to $5.3 billion due to a 4% increase in unit volume, partially offset by lower pricing of 1%.

Excluding the impacts of foreign exchange and acquisitions and divestitures, organic sales increased 4%.

Global market share of the Baby, Feminine & Family Care segment was unchanged.

• Baby Care net sales decreased low single digits.

Negative impacts of a decrease in unit volume, lower pricing (driven by merchandising investments in North America and Europe) and divestitures were partially offset by favorable geographic and product mix (due to a higher proportion of premium diapers, which have higher than category-average selling prices).

The unit volume decline was driven by Europe and Asia Pacific (both due to market contraction).

Organic sales decreased low single digits due to a double digit decline in Asia Pacific and a mid-single-digit decline in Europe, partially offset by a mid-single-digit growth in Latin America.

Global market share of the Baby Care category was unchanged.

• Feminine Care net sales increased low single digits.

Positive impacts of favorable geographic mix were partially offset by a decrease in unit volume.

The unit volume decrease was primarily driven by declines in Greater China (due to share losses) and IMEA (due to increased pricing), partially offset by growth in North America (due to market growth).

Organic sales increased low single digits driven by a mid-single-digit growth in North America, partially offset by a mid-single-digit decline in Greater China.

Global market share of the Feminine Care category decreased 0.4 points.

• Net sales in Family Care, which is predominantly a North America business, increased double digits driven by an increase in unit volume (due to strong consumption offtake and retail inventory build), partially offset by lower pricing (due to investments).

Organic sales increased double digits.

North America market share of the Family Care category increased 0.3 points.

Net earnings increased 2% to $1.1 billion driven by the increase in net sales, partially offset by the 30 basis-point decline in net earnings margin.

Net earnings margin decreased primarily due to a decline in gross margin, partially offset by a decline in SG&A as a percentage of net sales.

Gross margin decreased primarily due to higher commodity costs and unfavorable mix, partially offset by increased productivity savings.

SG&A as a percentage of net sales decreased due to a decrease in marketing spending, higher foreign exchange transactional charges in the prior year period and positive scale effects of the net sales increase.

Six months ended December 31, 2024, compared with six months ended December 31, 2023

Baby, Feminine & Family Care net sales increased 1% to $10.4 billion driven by a 1% increase in unit volume.

Excluding the impacts of foreign exchange and acquisitions and divestitures, organic sales increased 2%.

Global market share of the Baby, Feminine & Family Care segment decreased 0.1 points.

• Baby Care net sales decreased high single digits.

Negative impacts of a decrease in unit volume, unfavorable foreign exchange and divestitures were partially offset by favorable geographic and product mix (due to a higher proportion of premium diapers, which have higher than category-average selling prices).

The unit volume decline was driven across most regions led by IMEA (due to share losses), Latin America (due to the substantial liquidation of operations in Argentina) and Europe (due to share losses).

Organic sales decreased mid-single digits due to a mid-teens decline in IMEA and high single-digit decline in Europe, partially offset by a high single-digit growth in Greater China.

• Baby Care net sales decreased mid-single digits.

Negative impacts of a decrease in unit volume, unfavorable foreign exchange and lower pricing (driven by merchandising investments in North America and Europe) were partially offset by favorable product mix (due to growth of premium diapers, which have higher than category-average selling prices).

The unit volume decline was driven across most regions led by Europe and Asia Pacific (both due to market contraction) and IMEA (due to share losses).

Organic sales decreased low single digits primarily driven by a double-digit decline in IMEA and a high single-digit decline in Europe.

Global market share of the Baby Care category decreased 0.2 points.

• Feminine Care net sales were unchanged.

• Feminine Care net sales increased low single digits.

Positive impacts of favorable geographic mix and higher pricing (driven primarily by North America and IMEA) were partially offset by a decrease in unit volume and unfavorable foreign exchange.

The volume decrease was primarily driven by declines in Greater China (due to share losses) and Europe (due to increased pricing), partially offset by growth in North America (due to market growth).

Organic sales increased low single digits driven by a low single-digit growth in North America partially offset by a mid-single-digit decline in Greater China.

Global market share of the Feminine Care category decreased 0.5 points.

Organic sales increased low

The Procter & Gamble Company 25

• Net sales in Family Care, which is predominantly a North America business, increased low single digits driven by an increase in unit volume, partially offset by lower pricing (due to increased promotional spending).

Organic sales increased mid-single digits.

North America market share of the Family Care category was unchanged.

Net earnings decreased 1% to $1.1 billion as the decrease in net sales was partially offset by a 20 basis-point increase in net earnings margin.

Net earnings margin increased primarily due to a slight increase in gross margin and a lower effective tax rate.

Gross margin increased primarily due to increased productivity savings partially offset by higher commodity costs.

SG&A as a percentage of net sales was unchanged as an increase in overhead spending was offset by higher foreign exchange transactional charges in the prior year period.

The lower effective tax rate was driven by favorable geographic mix.

single digits driven by a mid-single-digit growth in North America, partially offset by a mid-single-digit decline in Greater China.

Global market share of the Feminine Care category decreased 0.4 points.

• Net sales in Family Care, which is predominantly a North America business, increased high single digits driven by an increase in unit volume (due to strong consumption offtake and retail inventory build), partially offset by lower pricing (due to investments).

Organic sales also increased high single digits.

North America market share of the Family Care category increased 0.1 points.

Net earnings were unchanged at $2.2 billion as the increase in net sales was offset by a 10 basis-point decrease in net earnings margin.

Net earnings margin decreased primarily due to a decrease in gross margin, partially offset by a decrease in SG&A as a percentage of net sales.

Gross margin decreased primarily due to higher commodity costs and unfavorable mix, partially offset by productivity savings.

SG&A as a percentage of net sales decreased due to higher foreign exchange transactional charges in the prior year period and the positive scale impacts of the net sales increase, partially offset by an increase in overhead spending.

Corporate includes certain operating and non-operating activities not allocated to specific business segments.

2 unchanged sentences

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 September 30, 2024, Corporate net sales increased $19 million to $163 million due to an increase in net sales of incidental businesses managed at the corporate level.

Corporate net earnings decreased $539 million to a loss of $707 million for the quarter due primarily to incremental restructuring charges.

For the three months ended December 31, 2024, Corporate net sales increased $34 million to $159 million due to an increase in net sales of incidental businesses managed at the corporate level.

Corporate net earnings increased $1.2 billion to a loss of $24 million for the quarter due primarily to the non-cash impairment charge of $1.3 billion ($1.0 billion after tax) on the Gillette intangible asset in the prior year.

For the six months ended December 31, 2024, Corporate net sales increased $52 million to $322 million due to an increase in net sales of incidental businesses managed at the corporate level.

Corporate net earnings increased $652 million to a loss of $731 million due primarily to the non-cash impairment charge of $1.3 billion ($1.0 billion after tax) on the Gillette intangible asset in the prior year, partially offset by incremental restructuring charges in the current year, comprised primarily of accumulated foreign currency translation losses due to the substantial liquidation of operations in Argentina.

LIQUIDITY & CAPITAL RESOURCES

2 unchanged sentences

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 $11.3 billion of operating cash flow.

Working capital and other impacts used $1.5 billion of cash in the period primarily driven by the payment of prior fiscal year-end incentive compensation accruals, reduction in postretirement benefit accruals and current portion of the transitional tax payments related to the U.S.

Days sales outstanding were flat and Days inventory on hand increased one day.

Working capital and other impacts used $2.2 billion of cash in the period primarily driven by the payment of the transitional tax related to the U.S.

Tax Act, the payment of prior fiscal year-end incentive compensation accruals and a reduction in postretirement benefit accruals.

Days sales outstanding were flat.

Days inventory on hand decreased by one day.

Investing Activities

Investing activities used $1.1 billion of cash fiscal year to date primarily driven by capital expenditures and the settlement of net investment hedges.

Investing activities used $2.0 billion of cash fiscal year to date primarily driven by capital expenditures.

Financing Activities

Financing activities used $6.2 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 and the impact of stock options and other.

As of September 30, 2024, our current liabilities exceeded current assets by $9.0 billion.

As of December 31, 2024, our current liabilities exceeded current assets by $8.2 billion.

We anticipate being able to support our short-term liquidity and operating needs largely through cash generated from operations.

6 unchanged sentences

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 measures are also used to evaluate senior management and are a factor in determining their at-risk

26 The Procter & Gamble Company

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.

4 unchanged sentences

This measure is used in assessing the achievement of management goals for at-risk compensation.

The Procter & Gamble Company 21

The following table provides a numerical reconciliation of organic sales growth to reported net sales growth:

Three Months Ended September 30, 2024 Net Sales Growth Foreign Exchange Impact Acquisition & Divestiture Impact/Other (1)

The following tables provide a numerical reconciliation of organic sales growth to reported net sales growth:

Three Months Ended December 31, 2024 Net Sales Growth Foreign Exchange Impact Acquisition & Divestiture Impact/Other (1)

Organic Sales Growth

6 unchanged sentences

(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, 2024 Net Sales Growth Foreign Exchange Impact Acquisition & Divestiture Impact/Other (1)

Organic Sales Growth

Beauty (3) % 1 % 2 % — %

Grooming — % 2 % 1 % 3 %

Health Care 2 % 1 % — % 3 %

Fabric & Home Care 1 % 1 % 1 % 3 %

Baby, Feminine & Family Care 1 % — % 1 % 2 %

Total Company 1 % 1 % — % 2 %

(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.

3 unchanged sentences

The following table provides a numerical reconciliation of adjusted free cash flow ($ millions):

Three Months Ended September 30, 2024

Six Months Ended December 31, 2024

Operating Cash Flow Capital Spending U.S.

7 unchanged sentences

The following table provides a numerical reconciliation of adjusted free cash flow productivity ($ millions):

Three Months Ended September 30, 2024

Six Months Ended December 31, 2024

Adjusted Free Cash Flow Net Earnings Adjustments to

14 unchanged sentences

The adjustment to Core earnings includes the restructuring charges that exceed the normal, recurring level of restructuring charges.

• Intangible asset impairment:

In the fiscal year ended June 30, 2024, the Company recognized a non-cash, after-tax impairment charge of $1.0 billion ($1.3 billion before tax) to adjust the carrying value of the Gillette intangible asset acquired as part of the Company's 2005 acquisition of The Gillette Company.

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.

2 unchanged sentences

Reconciliation of Non-GAAP Measures

Three Months Ended September 30, 2024 Three Months Ended September 30, 2023

Three Months Ended December 31, 2024 Three Months Ended December 31, 2023

Amounts in millions except per share amounts As Reported

(GAAP) Incremental Restructuring Intangible Impairment Core

Cost of products sold $ 10,418 $ 10,144 $ (12) $ — $ 10,132

Selling, general and administrative expense 5,723 5,522 (8) — 5,515

Operating income 5,741 4,433 19 1,341 5,793

Income taxes 1,187 1,003 (20) 315 1,299

Net earnings attributable to P&G 4,630 3,468 39 1,026 4,533

Diluted net earnings per common share (2)

$ 1.88 $ 1.40 $ 0.02 $ 0.42 $ 1.84

(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 IN CURRENT YEAR REPORTED (GAAP) MEASURES VERSUS PRIOR YEAR NON-GAAP (CORE) MEASURES

Core net earnings attributable to P&G 2 %

28 The Procter & Gamble Company

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) As Reported

Cost of products sold $ 20,839 $ 20 $ 20,859

2 unchanged sentences

Other non-operating income/(expense), net

(330) 789 459

Income taxes 2,339 (7) 2,331

2 unchanged sentences

$ 3.49 $ 0.33 $ 3.81

(1) For the three months ended September 30, 2023, there were no adjustments to or reconciling items for Core EPS.

(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 (12) %

Core net earnings attributable to P&G 4 %

THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES

Reconciliation of Non-GAAP Measures

Six Months Ended December 31, 2023

Amounts in millions except per share amounts As Reported (GAAP) Incremental Restructuring Intangible Impairment Core

Cost of products sold $ 20,645 $ (12) $ — $ 20,633

Selling, general and administrative expense 11,127 (8) — 11,119

Operating income 10,200 19 1,341 11,560

Income taxes 2,250 (20) 315 2,545

Net earnings attributable to P&G 7,988 39 1,026 9,054

Diluted net earnings per common share (1)

$ 3.23 $ 0.02 $ 0.42 $ 3.66

(1) Diluted net earnings per common share are calculated on Net earnings attributable to Procter & Gamble.

Quantitative and Qualitative Disclosures About Market Risk

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis