April 23 (Reuters) - Procter & Gamble is set to report a sixth straight quarter of gross margin declines as the consumer goods bellwether battles choppy demand and fresh cost pressures from the war in Iran.
The company reports fiscal 2026 third-quarter results on Friday.
• The war in Iran has driven up freight costs, as well as prices for petrochemical derivatives used in packaging, in the latest disruption of the supply chain for global consumer goods companies.
• This week, consumer goods giant Nestle,
Dettol maker Reckitt and condom maker Karex flagged pressure from the fallout of high oil prices.
• P&G's third-quarter gross profit margin is expected to drop 0.03%, according to data compiled by LSEG.
• Revenue is expected to grow 3.7%, following a 1% rise in the three months ended December, as demand for beauty and hair care products holds up strong in the U.S., likely echoing results from rivals such as L'Oreal.
• Cincinnati-based P&G has reported weak sales volumes for other categories such as feminine and baby care and grooming due to weak demand from budget-conscious consumers in the U.S. dealing with high cost of living.
• The company is expected to signal that its fiscal 2026 earnings per share and sales could fall at the lower end of its target of flat to 4% growth as it deals with incremental cost pressures coupled with unfavorable moves in foreign exchange, analysts at UBS and Jefferies have said.
• P&G's shares have dropped nearly 15% since the war in Iran began two months ago, compared with about a 7.4% drop in the S&P 500 Consumer Staples index. The benchmark S&P 500 index has risen about 4%, hitting a record high recently amid a ceasefire.
• Cost pressures and their impact on fiscal 2027 will be a key area of focus, said Peter Grom, analyst at UBS.
(Reporting by Juveria Tabassum in Bengaluru; Editing by Sriraj Kalluvila)
