The Procter & Gamble Company (PG) kept its fiscal 2027 earnings targets on Thursday, even as it put about $1.4 billion after tax on higher raw material, energy and transportation costs for the year.

First quarter net sales rose 4% to $23.3 billion in the three months to September 30, according to the earnings release P&G filed with the SEC. Organic sales, which strip out currency and acquisitions, also grew 4%. Volume added 2 points and mix added 1 point, while pricing had a minor positive effect.

Diluted earnings per share rose 1% to $1.97. Core EPS, the company's adjusted measure, rose 1% to $2.00 and was flat on a currency neutral basis.

Margins carried the cost. Core gross margin fell 150 basis points to 50.0%, where a basis point is one hundredth of a percentage point. Higher commodity costs and product reinvestment each took 140 basis points. Productivity savings returned 120 basis points, and lower tariff costs and recoveries added 50 basis points. Core operating margin fell 80 basis points to 25.9%.

All five segments grew organically. Beauty led at 5.4%, followed by Fabric and Home Care at 4.8% and Grooming at 4.5%. Baby, Feminine and Family Care grew 3.0% and Health Care 2.7%.

P&G maintained organic sales growth of 1% to 3% and core EPS growth of flat to 3% from last year's $6.89. It updated all-in sales guidance to growth of 2% to 4% to reflect the Thorne acquisition, which it owns as of October 1, 2026. The commodity bill, higher interest costs, lower non-operating income and currency together cost $0.79 a share, which P&G puts at an 11% drag on core EPS growth.

"We are confident in the near term and excited about the future," said Shailesh Jejurikar, chairman, president and chief executive.

To reach the $7.00 midpoint, P&G needs $5.00 of core EPS over the next three quarters, as calculated by Trend & Ticker. That is about 2% above the $4.90 it earned in the same stretch of fiscal 2026 ($6.89 for the year less $1.99 in the first quarter).

Free cash flow, the cash left after capital spending, was $4.4 billion, or 93% of net earnings, above the 85% to 90% full year target. The company paid $2.6 billion in dividends and bought back $1.25 billion of stock, a quarter of the roughly $5 billion repurchase plan for the year. Our earlier preview of the quarter set out the core EPS gap going in.