WSJ US BusinessProcter & Gamble Will Raise Prices in September

April 20, 20210
http://www.gmi-co.com/wp-content/uploads/2021/04/procter-gamble-will-raise-prices-in-september.jpg

Procter & Gamble Co. PG 0.75% this fall will start charging more for household staples from diapers to tampons, the latest and biggest consumer-products company to announce price hikes.

The maker of Gillette razors and Tide detergent cited rising costs for raw materials, such as resin and pulp, and higher expenses to transport goods.

The announcement, which came as P&> disclosed its quarterly financial results, follows a similar move last month by rival Kimberly-Clark Corp.

P&> said organic sales grew 4% in the quarter ended March 31, with the biggest gains in the company’s beauty and fabric and home-care units.

The results mark P&>’s slowest overall organic sales increase since 2018, following a year in which the Covid-19 pandemic created high demand for products such as cleaning supplies, paper towels and toilet paper.

SHARE YOUR THOUGHTS

How has your purchase of household supplies changed this year compared to last year? Join the conversation below.

“It’s a different situation, as everywhere in the world countries are in very different places as far as coming out of the pandemic,” operating chief Jon Moeller said in an interview. “There is very strong consumption across the board.”

While sales are cooling for some products, Mr. Moeller said, demand is recovering for others, such as beauty products and supplies sold directly to businesses that are reopening after widespread shutdowns.

Mr. Moeller said P&> aims to improve and add features to products, as the company increases prices so that consumers feel they are getting more. The price increases, to take effect in September, will be on baby products, adult diapers and feminine-care brands and will be in the mid- to high-single-digit percentage points, the company said.

The last time big consumer-products companies raised prices significantly because of materials costs was 2018, when surging pulp prices drove up the cost of diapers, toilet paper and other products.

Kimberly-Clark, maker of Huggies diapers and Scott paper products, said its percentage increases would be in the mid- to high-single digits and take effect in late June. They will apply to the company’s baby- and child-care, adult-care and Scott bathroom tissue businesses.

Several food makers have raised prices as well. Hormel Foods Corp. said in February that it raised prices on its turkey products, such as Jennie-O ground turkey, in response to higher grain costs. J.M. Smucker Co. said it recently raised prices for its Jif peanut butter and that it might do the same with pet snacks because of higher shipping costs and other inflationary pressure.

The Labor Department said last week that its consumer-price index—which measures what consumers pay for everyday items, including groceries, clothing, recreational activities and vehicles—jumped 2.6% in the year ended March, the biggest 12-month increase since August 2018.

During the quarter, P&>’s net sales rose 5% to $18.1 billion, above the consensus forecast of $18 billion from analysts polled by FactSet. Volume was flat for the first time in years, while price and mix both increased 2%.

P&> posted net income of $3.27 billion, or $1.26 a share, up from $2.92 billion, or $1.12 a share, a year earlier. Analysts expected net income of $3.09 billion.

The company maintained its forecast of organic sales growth of 5% to 6% for the fiscal year that ends June 30.

To help protect against the coronavirus, the CDC recommends cleaning and disinfecting frequently touched surfaces daily. Bryan Warcholek, who leads the Covid-19 team for biohazard clean-up company Aftermath Services, shows how it’s done. Photo: Adam Falk/The Wall Street Journal

Write to Sharon Terlep at sharon.terlep@wsj.com

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Leave a Reply

Your email address will not be published. Required fields are marked *

700 Louisiana Street , Houston TX. 77002
(+1) 832-390-2738
info@gmi-co.com

Follow us:

FREE CONSULTATION

Calls may be recorded for quality and training purposes.

Copyright © GMI 2020