The Procter & Gamble Company (NYSE: PG) issued its fiscal 2025 first-quarter earnings report on Friday, missing sales and net income estimates but topping adjusted profit estimates.

Fiscal First Quarter Highlights

For the quarter ended on September 30th, P&G reported net sales dropped 1% to $21.74 billion

Putting away  foreign exchange, acquisitions and divestitures, organic revenue grew 2% helped by higher prices. However, volume was flat, which is a better reflection of sales. While in the U.S., P&G’s volume grew in eight of its 10 categories, Greater China told an entirely diferent story with both its hair care and oral care segments reporting volume declines.

Overall, health care and baby, feminine and family care divisions all reported 1% volume declines, the beauty business experienced a volume decline of 2%, while organic sales of the skin care segment tumbled more than 20%. Supported by innovation, grooming division was a rare bright spot with volume growth of 4%. Fabric and home care reported a mild volume rise of 1%.

Getting down to the bottom line, net income attributable to the company amounted to $3.96 billion, or $1.61 per share, with adjusted earnings per share amounting to $1.93 per share.

After several price hikes over the last few years, P&G has seen demand for its products drop. The last quarter was the first time in more than two years that P&G experienced an increase in volume, but it was apparently short-lived. With the falling global birth rate continues to drop, P&G has been trying to push consumers to buy more expensive baby care items but organic sales of the baby care segment fell by mid-single digits as that strategy cannot always make up for the volume decline.

P&G remains on track to deliver its guidance.

P&G reiterated its fiscal 2025 guidance, expecting revenue growth between 2% and 4% and net earnings per share ranging from $6.91 to $7.05. But, P&G CFO CFO Andre Schulten noted that the Chinese market will continue to be weak for quarters to come. The macroeconomic environment in the U.S. that accounts for almost half of total sales remains challenging with uncertainty pushing consumers to discount-offering rivals and cheaper brands. Its rival in packaged foods manufucating, Nestle S.A. (OTC: NSRGY) lowered its annual sales outlook. Nestle expects the weak demand environment to continue. After reporting dissapointing sales, Nestle announced changes corporate structure changes, aiming to streamline its operating structure. With the pandemic and the war in Ukraine, the packaged foods industry is not alone in struggling with soaring costs as prices of everything from raw materials to packaging continues to go through the roof. Even a Swiss giant like Nestle is dealing with a very painful and unprecedented reset as just like P&G, it faces not only a demand slowdown but a significantly weakened consumer in the eyes of unprecedented uncertainty that has been lingering for quite some time, without any signs of going away.