Procter & Gamble gave a soft outlook for its new fiscal year, as it expects to take a $1 billion hit from higher costs related to the Iran war.

The maker of Crest toothpaste and Pantene shampoo also logged a lower profit in its latest quarter, as higher costs and sluggish sales weighed on its bottom line. Like many consumer-facing companies, P&G is navigating a combination of price-sensitive shoppers and higher costs for fuel and other supplies.

"As we enter fiscal '27, we continue to expect the environment around us to remain volatile and challenging," Chief Financial Officer Andre Schulten told analysts Wednesday.

The stock declined 4% to $143.20 on Wednesday morning.

For the year ahead, P&G expects adjusted earnings per share will be flat to up 3%, to about $7 at the midpoint, compared with analysts' forecast of $7.02.

The company projects sales growth of about 1% to 3% for the year, implying sales of about $88.77 billion at the midpoint. Analysts forecast sales of $89.4 billion for the year.

Expenses related to the conflict in the Middle East are expected to cost a total of $1 billion after tax this year, driven by expenses for raw materials, energy and transportation. P&G's guidance assumes the current state of the conflict remains the same, with fighting continuing and the Brent crude oil price staying around $90 a barrel, executives said.

Along with higher commodity costs, P&G is also facing freight surcharges, inflation from suppliers and force majeure fees related to the conflict.

The company said earnings per share in its current first quarter are likely to be down 5% or more compared with the prior year, with most of the impact from the war felt in the first half of the new fiscal year.

Management said it left room in its guidance range for more softness in consumer demand. Right now, shoppers are looking for maximum value and are more discerning about what they buy, executives said.

Fourth-quarter profit came in at $3.04 billion, or $1.26 a share, down from $3.62 billion, or $1.48 a share, a year earlier. The decrease was driven by higher selling, general and administrative costs, which more than offset a slight uptick in sales.

Adjusted earnings per share were $1.43, compared with estimates of $1.41 a share according to analysts polled by FactSet.

Sales ticked up 2% to $21.2 billion, missing analyst estimates of $21.38 billion. The company attributed the growth to foreign exchange and rounding effects.

Organic sales, which strips out the effects of acquisitions, divestitures and currency effects, were flat. The metric rose in P&G's beauty segment but fell in its healthcare unit and baby, feminine and family care division.