THE PROCTER & GAMBLE COMPANY ANNUAL MEETING OF SHAREHOLDERS - PROCTER & GAMBLE CO

Financial Performance:

• Fiscal Year 2026 net tariff impact resulted in a $250 million pre-tax headwind, contributing to a broader $1.2 billion headwind from commodities, foreign exchange, and interest rates.
• Dividend declared at $1.0885 per share, payable November 16, 2026; marks the 136th consecutive year of dividend payments and the 70th consecutive year of increases.
• Management affirmed a focus on disciplined execution to drive balanced growth in sales, earnings, and cash flow rather than relying on stock splits.
• The acquired Thorne brand is noted for attractive margins and a strong top-line growth profile.

Guidance and Future Outlook:

• Management views current underperformance relative to peers and the S&P 500 as cyclical, not indicative of a need for strategic pivots, citing core competency in category leadership.
• Long-term outlook focuses on evolving into a "CPG of the future" by adapting to media fragmentation, retail landscape shifts, and inflation through improved innovation, supply chain agility, and simplified internal processes.
• Future growth is targeted via a "Stronger Core, Bigger More" innovation strategy, enhancing existing products while launching new offerings to expand user bases.
• No specific numerical forward guidance was provided in this transcript, as the company deferred detailed updates to a future earnings call regarding evolving tariff situations.

Business Segments and Product Lines:

• Laundry: Upgraded Tide product lines for superior performance (Stronger Core) and launched breakthrough products like Tide Evo and Downy Unstoppables to attract new users (Bigger More).
• Healthcare: Integration of the recently acquired Thorne brand into the Personal Healthcare segment to leverage its loyal consumer base, high-quality supplement portfolio, and professional endorsements.
• Packaging & Sustainability: 80% of consumer packaging is now designed to be recyclable or reusable (up from 55% in 2018); virgin petroleum plastic use reduced by 24% since 2018.
• AI Implementation: Deploying AI tools across consumer insights, brand building, innovation modeling, and supply chain to amplify human potential rather than eliminate jobs.

Market and Competitive Landscape:

• Competitive threats identified include private label growth and emerging brands; P&G counters with superior innovation and execution in core categories.
• Supply chain footprint remains a key advantage, with over 85% of products sold in the U.S. manufactured domestically to reduce transportation costs and ensure service reliability.
• The company aims to maintain market share by adjusting packaging, communication, and pricing to align with evolving consumer and retailer needs.

Risks and Challenges:

• Macroeconomic Volatility: Operating environment impacted by inflation, currency fluctuations, commodity costs, and tariff volatility.
• Regulatory Changes: Uncertainty surrounding potential SEC rescission of Rule 14AA and the subsequent impact on shareholder proposal access thresholds.
• Supply Chain Dependencies: Progress on circular economy and plastic recycling is constrained by external supply chain and infrastructure limitations beyond direct company control.
• Geopolitical: Evolving tariff situations, specifically regarding Canadian imports, remain an area of active monitoring.

Management Commentary and Tone:

• Tone is confident and resilient; management emphasizes that fundamentals remain unchanged and that the company is executing a transformation to address external challenges.
• CEO Shailesh Jujuri and CFO Andre Schulten expressed firm belief in the company's ability to generate value through existing categories and productivity improvements.
• Leadership rejected the notion of a stock split, arguing that fractional share purchases render splits unnecessary and that such moves do not create fundamental value.
• Board governance was defended as robust, with a recommendation against shareholder proposals regarding lowering special meeting thresholds and mandated charitable reporting.

Analyst Questions and Answers:

• Strategy vs. Peer Performance: Management responded that underperformance is due to external world changes, not strategy failure, and cited ongoing adjustments to execution frameworks.
• Innovation Acceleration: Detailed specific examples in laundry (Tide Evo) as the primary mechanism to combat competition and drive growth.
• ESG and Philanthropy: Reiterated that charitable giving aligns with the company purpose, is governed by strict review processes, and that the company will not retreat from equality and inclusion initiatives.
• Product Safety: Reaffirmed that all products meet rigorous safety standards and ingredient transparency protocols.
• Acquisition Rationale: Thorne was acquired for its growth potential, loyal customer base, and complementary fit with the Personal Healthcare segment.

Other Key Points:

• Shareholder Votes: All 12 director nominees were elected; ratification of Deloitte & Touche and the "say on pay" vote passed.
• Rejected Proposals: Three shareholder proposals (lowering special meeting thresholds to 15%, mandating policy on proposal eligibility thresholds, and requiring annual charitable contribution reporting) all failed.
• Board Refreshment: Seven new directors were added over the past four years; board size set at 12 with director compensation benchmarked at the 44th percentile of peers.
• Retiring Director: Deborah Lee was acknowledged for her six years of service upon her departure.