P&G’s (PG) $3.8B Wellness Deal Collides With a Costly Outlook
Maham Fatima
Mon, August 10, 2026 at 12:05 AM GMT+5:30
4 min read
- PG
-0.80%
Procter & Gamble (NYSE:PG) is buying its way into wellness. On August 4, L Catterton announced it had signed a definitive agreement to sell Thorne, a science-backed health and wellness brand, to Procter & Gamble for $3.8 billion in cash. The deal lands a day after an August 3 analysis flagged a fiscal 2027 earnings guide that came in below expectations, weighed down by roughly $1 billion in new cost headwinds. Investors now have two stories to weigh at once: fresh expansion and a tougher near-term cost picture.
Bull Case: A Bigger Foothold In Trusted Wellness
The Thorne acquisition gives Procter & Gamble entry into a category built on clinical credibility rather than shelf space. Thorne has spent 40 years building relationships with healthcare practitioners, and L Catterton’s announcement noted the company developed a proprietary AI wellness advisor to help consumers navigate its supplement lineup, a tool practitioners can point their patients to directly
The transaction is expected to close in the fourth quarter of 2026, an all-cash deal with no debt or equity swapped into the mix. Procter & Gamble isn’t skimping on shareholders while it shops, either. The company returned $10.2 billion in dividends and $5.0 billion in share repurchases during fiscal 2026, and it plans roughly the same combination, about $10 billion in dividends and $5 billion in buybacks, for fiscal 2027. There’s a case buried inside the company’s own guidance, too. Strip out the roughly $1 billion in commodity, energy, and transportation costs management expects to absorb next year, and core EPS would be growing at about 10% instead of the 0% to 3% baked into the outlook.
Bear Case: Guidance That Undercuts The Story
The numbers behind the fiscal 2027 outlook explain the caution. Management guided core EPS to $6.89 to $7.11, implying growth of just 0% to 3%, and pointed to roughly $1 billion in after-tax commodity, energy, and transportation costs as the main culprit. Add higher net interest expense, lower non-operating income, and unfavorable currency, and the total drag reaches $0.56 per share, wiping out about 8 percentage points of core earnings growth before the year even starts
The trend already shows up in recent results. In the fiscal fourth quarter, net sales rose 2% year-over-year to $21.2 billion while organic sales were flat, and core EPS fell 3% to $1.43. For the full fiscal year, net sales grew 3% to $87.0 billion, but organic sales rose only 1%, and every bit of that growth came from higher prices rather than more units sold. Volume and mix didn’t move. Shares trade near $144, about 5% above their 52-week low of $137.62, or roughly 21 times fiscal 2026 core earnings of $6.89. That’s not an expensive multiple, but it isn’t cheap for a business guiding to low-single-digit growth.
