NEW YORK (AP) – Proctor & Gamble is raising prices for a line of products as rising commodity and freight costs are expected to reduce profits.
The maker of Pampers diapers, Tide detergent and Crest toothpaste said Tuesday it had raised prices for product lines including baby, family, home and tissue care. In recent weeks, he began telling retailers he would raise prices in more categories, including grooming, skin care and oral care.
âThe degree and timing of these moves is very specific to the category, brand and sometimes product form within a brand,â CFO Andre Schulten said on a call to discuss the results. quarterly. “It’s not a one-size-fits-all approach.”
And although it is still early days, the company has yet to see “noticeable changes” in consumer behavior in response to the price hike, he said.
Schulten said the Cincinnati-based company now expects a commodity impact of $ 2.1 billion in fiscal year 2022. This is an increase from the $ 1.8 billion estimated in July. .
P&G is also seeing higher transportation costs, partly reflecting a shortage of truck drivers and soaring diesel fuel costs. In July, the company estimated it would cost an additional $ 100 million for this fiscal year. On Tuesday, the consumer goods maker doubled that estimate to $ 200 million.
Together, the higher costs of $ 2.3 billion will reduce FY2022 profits by about 90 cents per share.
Last week, the Labor Department announced that wholesale prices rose a record 8.6% in September from a year ago, the biggest gain since the 12-month change was first calculated in 2010. The rise in inflation this year reflects rising food and energy prices. . Core inflation at the wholesale level, excluding volatile energy and food, increased 0.2% in September from August and 6.8% in the past 12 months.
At the same time, retail inflation rose 0.4% in September, according to government data, with the consumer price index rising 5.4% in the past 12 months. , the fastest pace since 2008.
P&G has stuck to its annual forecast and doesn’t think inflation is here to stay, calling it a “temporary bottom line movement to get through.”
âWhen opportunities permit, we will close out some price increases with new product innovations, thereby adding value for consumers along the way,â said Schulten.