The Procter & Gamble Company PG, also known as P&G, is set to report third-quarter fiscal 2025 results on April 24, before the opening bell. The company is expected to have witnessed year-over-year sales and earnings growth in the to-be-reported quarter.

The Zacks Consensus Estimate for fiscal third-quarter revenues is pegged at $20.3 billion, indicating a 0.7% rise from the prior-year quarter’s figure. The consensus mark for PG’s fiscal third-quarter earnings is pegged at $1.55 per share, indicating 2% growth from the year-ago quarter’s actual. The consensus mark has moved down by a penny in the past seven days. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

The Cincinnati, OH-based company has consistently delivered steady earnings, evidenced by its bottom-line beat trend over the past 10 quarters. PG has a trailing four-quarter earnings surprise of 3%, on average, including a 1.08% surprise in the most recent quarter. With this record, the question is whether PG can sustain this momentum.

PG’s Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Procter & Gamble this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Procter & Gamble has an Earnings ESP of -1.42% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Key Trends to Watch Ahead of PG's Q3 Earnings

Procter & Gamble continues to assert its global market leadership by leveraging its strong brand portfolio to fuel organic sales growth. As a producer of everyday consumer goods, P&G’s recent success reflects its strategic execution and brand power. These ongoing trends are expected to have supported continued organic sales growth in the fiscal third quarter.

PG’s organic sales for the fiscal third quarter are anticipated to have benefited from strong pricing strategies, a favorable product mix and robust segmental performances.

Our model predicts year-over-year organic sales growth of 3.2% for P&G in the third quarter of fiscal 2025. Organic sales are expected to rise 4% each for the Beauty, Health Care and Baby, Feminine & Family Care segments, 3% for the Grooming and 2% for the Fabric & Home Care segment.

P&G has been actively implementing cost-saving initiatives and productivity enhancements to strengthen margins and reinforce its competitive edge. The company's strategic focus on driving efficiency while navigating macroeconomic cost pressures has played a key role in sustaining balanced growth across both revenues and earnings. These ongoing efforts are expected to have aided margins in the to-be-reported quarter.

We expect PG's core gross margin for the fiscal third quarter to have been influenced by significant productivity savings. Our model predicts a year-over-year core gross margin expansion of 150 bps for the to-be-reported quarter.
 

However, Procter & Gamble continues to navigate several challenges, including market pressures in Greater China, geopolitical tensions and currency volatility. Among these, the situation in Greater China, P&G’s second-largest market, has been particularly pronounced, with a tough macroeconomic climate leading to a notable decline in consumer spending.

The company has also encountered brand-specific headwinds, especially with its flagship beauty brand SK-II, which has faced setbacks linked to its Japanese heritage. Additionally, heightened geopolitical tensions in certain regions have further weighed on consumer sentiment and dampened retail activity, compounding the broader market challenges.

On the last reported quarter’s earnings call, the company expected the global environment to remain volatile and challenging throughout fiscal 2025, relating to input costs, currencies, consumers, competitors, retailers and geopolitical dynamics. These are anticipated to have affected its performance in the fiscal third quarter.

Rising supply-chain costs, inflationary pressures and elevated transportation expenses have been driving up SG&A costs for Procter & Gamble. We estimate core SG&A expenses to grow 3.6% year over year for the fiscal third quarter. As a percentage of sales, core SG&A expenses are expected to increase 10 bps for the fiscal third quarter.

Price Performance & Valuation

PG shares have exhibited an uptrend in the past three months, recording growth of 3.3%. However, the leading consumer goods company’s shares have underperformed the industry and the Zacks Consumer Staples sector’s growth of 4.3% and 7.7%, respectively. Meanwhile, the stock has outperformed the S&P 500’s 10.4% decline.

PG's Three-Month Stock Performance

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At the current price of $166.39, Procter & Gamble is trading close to its 52-week low of $153.52. This represents an 8.4% premium to the 52-week low mark.

From the valuation standpoint, PG is trading at a forward 12-month P/E multiple of 23.04X, exceeding the industry average of 20.94X and the S&P 500’s average of 19.85X. Procter & Gamble’s valuation appears quite pricey.

Given the premium valuation, investors could face significant risks if the company's future performance does not meet expectations. The consumer goods market is becoming increasingly competitive, and Procter & Gamble’s innovation and market expansion may not suffice to drive significant growth. Macroeconomic challenges and heightened competition could impede the company's ability to sustain its current growth trajectory.

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Stocks With the Favorable Combination

Here are some companies that, according to our model, have the right combination of elements to beat on earnings this reporting cycle.

BJ's Wholesale Club BJ currently has an Earnings ESP of +2.09% and a Zacks Rank of 2. The company is likely to register an increase in the top and bottom line when it reports first-quarter fiscal 2025 numbers. The consensus mark for revenues is pegged at $5.2 billion, which implies growth of 5.3% from the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for BJ’s quarterly earnings has moved up a penny in the past 30 days to 91 cents per share, indicating an increase of 7.1% from the prior-year quarter. BJ delivered an earnings surprise of 12% in the trailing four quarters, on average.

Church & Dwight Co. CHD currently has an Earnings ESP of +0.66% and a Zacks Rank of 3. The company is expected to register an increase in its top line when it reports first-quarter 2025 numbers. The Zacks Consensus Estimate for CHD’s quarterly revenues is pegged at $1.5 billion, which indicates growth of 0.6% from the prior-year quarter’s figure.

The consensus mark for Church & Dwight’s quarterly earnings has been unchanged in the past 30 days at 89 cents per share. The estimate indicates a decline of 7.3% from the year-ago quarter. CHD delivered an earnings surprise of 9.6% in the trailing four quarters, on average.

Tyson Foods TSN currently has an Earnings ESP of +2.35% and a Zacks Rank of 3. TSN is likely to register top and bottom-line growth when it reports second-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $13.1 billion, indicating 0.2% growth from the figure in the year-ago quarter.

The consensus estimate for Tyson Foods’ fiscal second-quarter earnings is pegged at 85 cents per share, implying 37.1% growth from the year-earlier quarter. The consensus mark has declined 3.4% in the past 30 days. TSN delivered a negative earnings surprise of 52% in the trailing four quarters, on average.

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