Procter Gamble Co. is raising prices on a host of household staples as cost for freight and raw materials rise faster than the consumer product giant anticipated.
The maker of Tide detergent and Gillette razors said it would start charging more for certain beauty, oral care and grooming products such as razors. The price increases come in addition to earlier moves to charge more for staples from diapers to toilet paper.
P&G, which released quarterly financial results on Tuesday, said the moves, along with increased demand for its products, should help offset added costs.
U.S. inflation is the highest level of inflation in a decade as price increases from pandemic-related labor and materials shortages ripple through the economy
We do not anticipate any easing of costs, P&G Finance Chief Andre Schulten said in an interview. As new years continues, we continue to see increases week after week, though at a slower pace. P&G said organic sales, a measure that strips out deals and currency moves, increased 4% in the quarter ended September 30. Is profit dropped slightly? The company said core earnings per share slid 1% to $1.61.
No difference of analysis between P&G forecast and the real cost of living projection, which is faster than expected. P&G is now planning to spend $2.1 billion more on transportation and raw materials such as pulp and resin for the fiscal year ending June 2022. In July, the company predicted an increase of $1.9 billion.
Mr. Schulten said the company's overall high spending is largely broad ranging, particularly as it works to ensure it has products in stock as consumers encounter sparse shelves at stores.
He said P&G is enlisting backup suppliers, changing shipping routes to get around bottlenecks, reformulating products and in some cases limiting how much any one retailer can buy at a time to avoid stockpiling.
In the general category, it looks like we're in good supply, he said.
However, P&G continued its sales and profit outlook for the year, despite higher expenses, saying increasing revenue and cost reductions will enable the company to remain on track.
Demand remains high for pandemic hot sellers like cleaners, paper towels and toilet paper even as more people return to work and school, Mr. Schulten said. Organic sales rose in every segment of the last quarter, with consumers purchasing P&G products in high quantities and paying more, both because of price increases and because they favored premium mainstays, from pricey razors to highly-priced diapers.
The P&G net sales grew 5% in the latest quarter to $20.3 billion, higher than the consensus forecast of $19.8 billion by analysts polled by FactSet.