Procter & Gamble reports Q2 gross margin down 160 bps vs. a year ago

Gross margin for the quarter decreased 160 basis points versus year ago, 100 basis points on a currency-neutral basis. The decline was driven by 380 basis points of increased commodity and input material costs, 130 basis points of negative product mix and 140 basis points of capacity start-up costs and other impacts. These were partially offset by benefits of 470 basis points from increased pricing and 80 basis points from gross productivity savings. Selling, general and administrative expense as a percentage of sales increased 10 basis points versus year ago and decreased 30 basis points on a currency-neutral basis. The decrease was driven by 130 basis points of leverage due to organic sales growth and 30 basis points of productivity savings, partially offset by 130 basis points of inflation, capability investments and other impacts. Operating margin for the quarter decreased 170 basis points versus the prior year, 70 basis points on a currency-neutral basis. Operating margin included gross productivity savings of 110 basis points.